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Sector Overview

Travel & Tourism is one of the world’s largest economic sectors, creating exports and prosperity around the world. As per Global Economic Impact of Travel & Tourism (2018), Travel and Tourism sector has contributed 10.4% to global GDP, 4.6% in direct travel and tourism GDP, 9.9% of global employment highlighting high growth worldwide. Investments in Travel & Tourism sector in 2017 was accounted at USD 882.4 billion worldwide which is expected to rise by 4.3% pa over the next ten years to USD 1,408.3 billion by 2028 (5.1% of total).

  • Indian Tourism and Hospitality Sector have emerged as one of the key drivers of growth of Indian economy. Considering the rich cultural and historical heritage of the country, India have high potential in Tourism and Hospitality sector.
  • India ranks 7th among 184 countries in terms of travel & tourism’s total contribution to GDP (2017)
  • The number of Foreign Tourist Arrivals (FTAs) in February 2018 were 1.05 million as compared to FTAs of 956,000 in February 2017 and 849,000 lakhs in February 2016.
  • India offers diverse portfolio of niche tourism like Cruise Tourism, Adventure Tourism, Medical Tourism, Wellness and Sports, Eco-tourism, Film Making, Rural and one of the most important Religious Tourism. Some major emerging segments includes-
    Rural Tourism, Adventure Tourism, Medical Tourism, Heritage Tourism, Eco-Tourism Luxury Tourism, Pilgrimage Tourism
  • Tourism Sector is contributing enormously to employment as well as foreign exchange earnings for the country. In fact, it is the 3rd largest foreign exchange earners for the country.
  • According to the Global Business Travel Association (GBTA), India is the 10th largest Business Travel market globally. Also, India as one of the fastest-growing markets, it is expected to be the sixth-largest market by 2019.
  • The most flourishing India's Medical Tourism is estimated to be worth $US 5.8 billion in 2017. It is projected to grow to $7–8 billion by 2020
  • Foreign tourist arrivals into the country is forecast to increase at a CAGR of 7.1 per cent during 2005–25
Foreign tourist arrivals

Segments of Tourism and Hospitality Sector

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Share in International Tourist Arrivals
To achieve the target 1% share in world's international tourist arrivals by 2020 and 2% share by 2025.

Government of India has set a target of 20 million foreign tourist arrivals (FTAs) by 2020 and double the foreign exchange earnings as well.

International hotel chains presence is increasing in the country. It is targeted to have 47% share in the Tourism & Hospitality sector of India by 2020 & 50% by 2022

Travel & Tourism sector accounted for 41.6 million (8%) of the total employment opportunities generated in the country in 2017 & it is expected to rise to 52.3 million jobs by 2028.


References - Data and reports available in the public domain including Ministries Annual Reports and Data Statistics, IBEF Sectoral Reports, Department of Industrial Policy and Promotion (DIPP), RBI Handbook of Statistics on Indian Economy, Media & Industry Reports, Press Information Bureau (PIB), Union Budget 2018-19

Disclaimer - This information has been collected through secondary research and is available in the public domain. We are not responsible for any errors in the same.


India's Value Proposition/Advantages

  • The widespread practice of Ayurveda, yoga, siddha & naturopathy that is complemented by the nation’s spiritual philosophy makes India a famous wellness destination.
  • India has been known as the seat of spiritualism & India’s cosmopolitan nature is best reflected in its pilgrim centres
  • India offers geographical diversity, attractive beaches, 30 World Heritage Sites and 25 bio-geographic zones
  • The presence of world-class hospitals & skilled medical professionals makes India a preferred destination for medical tourism
  • Increasing number of Airports and Growth in low-cost airlines is expected to lower tourism costs & increase domestic spending on tourism
  • Rising incomes and economic growth promoting more domestic tourism.
  • Over 70% of air tickets are now being booked online in the country. A good number of online travel & tour operators, providing better prices & options to consumers, have emerged in India
india adnvatage

Sector Contribution to Economy

Sector Contribution to Economy
Share of tourists by expenditure (million) 2017
Capital Investments in the tourism sector (US$ Billion)
Segment Wise Revenue Share (2016)
  • During FY2017, share of revenues from leisure travel to the total tourism revenue stood around 94.6%. It has reached US$ 201.7 billion in 2017 and is expected to reach US$ 432.3 billion by 2028.
  • Revenues from Business Travel were US$11.6 billion in 2017 and is expected to increase to US$ 24.4 billion by 2028.

Policies and Government Initiatives


The Indian government realising potential of Indian Travel and Tourism Industry, has taken several steps to make India a global tourism hub.

Some of the major initiatives planned by the Government of India to give a boost to the tourism and hospitality sector of India are as follows:

  • Budget 2018-19 - Government has allotted Rs. 1,250 Crore (US$ 183.89 million) for Integrated development of tourist circuits under Swadesh Darshan and Pilgrimage Rejuvenation and Spiritual Augmentation Drive (PRASAD)
  • National Tourism Policy (2017) Government of India has revised National Tourism Policy with more focus on employment generation and community participation in tourism development. More Emphasis is given on technology enabled development in tourism.
  • FDI - 100% FDI is allowed under the automatic route in tourism & hospitality boosting the sector.
  • Swadesh Darshan – Policy launched in 2015 by Government of India to develop world class infrastructure to promote cultural and heritage of the country. To enhance the tourist attractiveness, 27 projects for Rs. 2261.50 crore have been sanctioned for 21 States and Union Territories.
  • Incredible India 2.0 campaign - Incredible India 2.0 campaign and ‘Adopt a Heritage’ were launched in September 2017. A digital calendar for Incredible India was launched by the Ministry of Tourism in January 2018.
  • Ease of doing Business - Ministry of Tourism has set up a Web-based Public Delivery System for recognition of Travel Trade Service Providers and for classification of hotels to ease the process of filing applications. This is also to bring in transparency in granting the approvals.
  • Hospitality Development and Promotion Board – Special Board has been set up by Government of India to facilitate the development of Hospitality sector with the objective of construction of hotels and managing projects related to Hospitality sector.
  • M-Visa & E-Tourist Visa - Indian government has also released a fresh category of visa – the medical visa or M visa, to encourage medical tourism in India. Indian medical tourism is expected to reach USD8 billion by 2020.
  • Tourist Safety Initiatives - Ministry of Tourism initiated State Governments/ Union Territory administrations of India to deploy Tourist Police (March 2018)
    Ministry of Tourism launched a 24x7 Toll Free Multilingual Tourist Infor-Helpline which will provide information relating to travel in India
  • Tax Incentives - Under Section 35 (AD) of Income Tax Act, 100% deduction in respect of establishing new hotels in the 2-star category and above across India. A 5-year tax holiday has been offered for 2,3 and 4 Star category hotels located around UNESCO World Heritage sites (except Delhi & Mumbai)
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