India's rich cultural heritage and history, food, friendly people, architectural monuments, hospitality and services are positive strengths for its tourism sector, which make it ahead of many of the emerging markets.
Today, tourism is the most vibrant tertiary sectors and has a strong hold on the economy. The sector contributes 6.23 per cent to the national gross domestic product (GDP) and 8.78 per cent of the total employment in India. Moreover, India stands 42nd in the world rankings in terms of foreign tourist arrivals (FTAs) in the country, according to a report titled 'Competitiveness of Tourism Sector in India with Selected Other Countries of the World' by Ministry of Tourism. The World Travel and Tourism Council (WTTC) named India as one of the fastest growing tourism industries for the next 10 to 15 years.
In addition, India has also developed as one of the world's most cost-efficient medical tourism destinations, and is anticipated that the Indian medical tourism market will register a compound annual growth rate (CAGR) of 27 per cent during 2011-15, as per a RNCOS report titled 'Booming Medical Tourism in India'.
"India is an extremely important market for IHG, one that we are always looking for the right opportunities to invest in. With international tourism increasing year-on-year and the continued strength of domestic tourism, we see incredible opportunities for growth," said Mr Jan Smits, Chief Executive Officer, InterContinental Hotels Group (IHG) in Asia, Middle East and Africa, who took part in a trade mission to India with Mr David Cameron, the British Prime Minister, to boost trade ties between the two countries.
The amount of foreign direct investments (FDI) inflow into the hotel and tourism sector during April 2000 to January 2013 was worth US$ 6,561.78 million, as per data provided by Department of Industrial Policy and Promotion (DIPP), Ministry of Commerce.
FTAs have shown a growth of 2.8 per cent in March 2013 over March 2012 while the growth rate in Foreign Exchange Earnings (FEEs) from tourism stood at 21 per cent over the same period in rupee terms. FTA during March 2013 was recorded at 640,000 as compared to 623,000 during the month of March 2012.
The Visa on Arrival (VoA) Scheme of the Government of India has registered a growth of 54.6 per cent in February 2013. A total number of 1,947 VoAs were issued last month as compared to 1,259 VoAs issued in February 2012.
Government Initiatives
The Ministry of Tourism, Government of India, has consistently been working on improving India as a prime destination for tourists. It further aims at promoting various Indian tourism products vis-à-vis competition faced from various destinations and to increase India's share of the global tourism market.
The Government of India allows 100 per cent foreign direct investment (FDI) in the hotel sector on automated basis.
The allocation for Ministry of Tourism in the Union Budget 2013-14 has been increased by Rs 87.66 crore (US$ 16.03 million) to Rs 1,297.66 crore (US$ 237.23 million).
Moreover, the Indian companies in the hotel sector, with a total project cost of Rs 250 crore (US$ 45.70 million) or more, irrespective of their geographical location, have been allowed to tap the external commercial borrowing (ECB) route. The maximum ECB by an individual company or group, as a whole, has been restricted to US$ 3 billion.
The fourth meeting of ASEAN and India Tourism Ministers was held in Vientiane, Lao People's Democratic Republic (PDR). A protocol to amend the memorandum of understanding (MoU) between ASEAN and India to strengthen tourism cooperation was also signed.
Mr Chiranjeevi, Union Minister for Tourism, Government of India, has complimented the Government of Madhya Pradesh for becoming the first State in the country to fully utilise plan funds released to them by the Ministry of Tourism, Government of India for the development of tourism infrastructure at various tourist sites in the State.
In a bid to give a boost to tourism in Uttarakhand, the State Government has identified 21 places endowed with natural beauty to develop them into major tourist destinations.
The Ministry of Tourism has also sanctioned central finance assistance (CFA) worth Rs 43.87 crore (US$ 8.02 million) for the development of Solapur mega circuit in Maharashtra.
Road Ahead
The tourism sector can also be considered as the backbone for allied sectors, like hospitality, civil aviation, and transport. Domestic tourism is very huge in the country, promoted by various intents. Pilgrim and leisure tourism are two very important sectors.
The Ministry of Tourism has also played an important role in the development of the industry, initiating advertising campaigns such as the 'Incredible India' campaign, which promoted India's culture and tourist attractions in a fresh and memorable way. The industry has been witnessing an upswing for last few years partially due to an excellent 'Incredible India' campaign and is expected to increase up to US$ 431.7 billion by the end of 2020.
On the other front, India has the potential to develop the rural tourism industry. This can benefit the local community economically and socially, and enable interaction between tourists and locals for a mutually enriching experience.
Exchange Rate Used: INR 1 = 0.01828 as on April 12, 2013
References: RNCOS Report, Media Reports, Ministry of Tourism, Press Releases, Department of Industrial Policy and Promotion (DIPP)