Travel and tourism is the largest service industry in India. This industry provides heritage, cultural, medical, business and sports tourism. It is expected that the tourism sector’s contribution to the country’s gross domestic product (GDP) will grow at the rate of 7.8 per cent yearly in the period 2013–2023.
The Indian tourism sector has been flourishing in recent years due to the improved connectivity to and from the country. Also, better lodging facilities at the tourist destinations has been a factor which has contributed to increased Foreign Tourist Arrivals (FTA).
The policies and changes implemented by the Government of India has also been instrumental in providing the necessary boost to the Indian tourism and hospitality industry and attracting more and more foreign tourists every year.
The tourism and hospitality sector is among the top 10 sectors in India to attract the highest foreign direct investment (FDI). In the period April 2000 – August 2014, this sector attracted around US$ 7,441 million of FDI, according to the Department of Industrial Policy and Promotion (DIPP).
A high and positive growth of 12.5 per cent was registered in foreign tourist visits (FTVs) to north-eastern states of India during 2012 from 2011, which further rose by more than 100 per cent to register a growth of 27.9 per cent during 2013 from 2012. Among these north-eastern states, Manipur recorded the highest FTVs followed by Arunachal Pradesh and then Tripura.
FTAs in India witnessed a growth of 12.9 per cent in the period July 2013 – July 2014, according to data received from Ministry of Tourism, Government of India. The FTAs during the period January–July 2014 stood at 4.11 million as compared to 3.87 million during the corresponding period of 2013, registering a growth of 4.4 per cent. USA contributed the highest number to foreign arrivals in India followed by Bangladesh and the UK.
Foreign exchange earnings (FEE) during January–July 2014 stood at US$ 11.055 billion as compared to US$ 10.85 billion during the same period last year. FEE during July, 2014 stood at Rs 10,336 crore (US$ 1.68 billion) compared to Rs 8,620 crore (US$ 1.41 billion) in July, 2013.
With the rise in the number of global tourists and realising India’s potential, many companies have invested in the tourism and hospitality sector. Some of the recent investments in this sector are as follows:
The Indian government has realised the country’s potential to rise in the tourism industry and has taken several steps to make India a global tourism hub. Some of the recent government initiatives in the sector are as follow:
The medical tourism market in India is projected to hit US$ 3.9 billion mark this year having grown at a compounded annual growth rate (CAGR) of 27 per cent over the last three years, according to a joint report by FICCI and KPMG. Also, inflow of medical tourists is expected to cross 320 million by 2015 compared with 85 million in 2012.
The tourism industry is also looking forward to the E-visa scheme which is expected to double the tourist inflow to India. Enforcing the electronic travel authorisation (ETA) before the next tourism season, which starts in November, will result in a clear jump of at least 15 per cent, and this is only the start, as per Mr Madhavan Menon, Managing Director, Thomas Cook India.
Exchange Rate Used: INR 1 = US$ 0.0163 as on October 28, 2014
References: Media Reports, Ministry of Tourism, Press Releases, Department of Industrial Policy and Promotion (DIPP)