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Indian Tourism and Hospitality Industry Analysis

November, 2017

India is a large market for travel and tourism. It offers a diverse portfolio of niche tourism products - cruises, adventure, medical, wellness, sports, MICE, eco-tourism, film, rural and religious tourism. India has been recognised as a destination for spiritual tourism for domestic and international tourists.

Total contribution by travel and tourism sector to India’s GDP is expected to increase from US$ 136.3 billion in 2015 to US$ 275.2 billion in 2025. India ranked third among 184 countries in terms of travel & tourism’s total contribution to GDP in 2016. Travel and tourism is the third largest foreign exchange earner for India. A sum of US$ 19.884 billion was earned under foreign exchange through tourism during January-September 2017. The sector accounted for 9.3 per cent of total employment generated in the country in 2016 and the employment in the sector is expected to rise to 46.42 million by 2026.During January – September 7.1 million foreign tourists have arrived in India.

The launch of several branding and marketing initiatives by the Government of India such as ‘Incredible India!’ and ‘Athiti Devo Bhava’ has provided a focused impetus to growth. The Indian government has also released a fresh category of visa - the medical visa or M visa, to encourage medical tourism in the country.Incredible India 2.0 campaign was launched in September 2017.

The Government has also been making serious efforts to boost investments in tourism sector. In the hotel and tourism sector, 100 per cent FDI is allowed through the automatic route. A five-year tax holiday has been offered for 2, 3 and 4 star category hotels located around UNESCO World Heritage sites (except Delhi and Mumbai). The investment in tourism sector is expected to be US$ 12.4 billion in the 12th Five Year Plan; of these, private investments are likely to total US$ 9.2 billion.Total FDI received by Indian tourism & hospitality sector was US$ 10.48 billion up to Q1 FY18.

 

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