Advantage India
Robust
Demand
*India's tourism and hospitality sector is expected to yield revenue exceeding Rs. 5,12,356 crore (US$ 59 billion) by 2028. Moreover, Foreign Tourist Arrivals (FTAs) are forecasted to hit 30.5 million by the same year.
*According to the Tourism Minister of India, country’s tourism industry is expected to grow with a compound annual growth rate (CAGR) of 20% in the next couple of decades, driven by the rise in India’s middle-income group and disposable income.
*International tourist arrivals are expected to reach 30.5 million by 2028.
Attractive
Opportunities
*India is geographically diverse and offers a variety of cultures that come with its own experiences, making it one of the leading countries in terms of international tourism expenditure.
*Travel and tourism are two of the largest industries in India, with a total contribution of about US$ 199.6 billion to the country’s GDP
*The government has taken steps to boost investments in facilitate spiritual tourism with states like Uttar Pradesh developing tourist circuits and Uttarakhand and West Bengal enhancing infrastructure for pilgrims.
Policy
Support
*India’s Union Budget FY26 has allocated Rs. 2,541.06 crore (US$ 291.07 million)to boost its tourism sector, focusing on improving infrastructure, skill development, and travel facilitation through measures like developing 50 top tourist destinations, offering MUDRA loans for homestays, enhancing connectivity, and introducing e-visa facilities.
*The budget also supports sustainable tourism with the Swadesh Darshan Scheme 2.0, promotes medical tourism under "Heal in India," revitalizes spiritual tourism, and preserves heritage through the Gyan Bharatam Mission, aiming to drive employment and economic growth.
*The Ministry of Tourism has approved 46 projects under its PRASHAD Scheme, including three in Andhra Pradesh. Additionally, 29 sites have been identified for development under this scheme, with two located in Andhra Pradesh.
Diverse
Attractions
*India is geographically diverse and offers a variety of cultures that come with its own experiences, making it one of the leading countries in terms of international tourism expenditure.
*According to WTTC, sector's contribution to GDP was Rs. 21,15,000 crore (US$ 250.2 billion) in CY24 and could potentially grow to Rs. 43.25 crore (US$ 511.5 billion) by CY34, supporting approximately 63 million jobs.
*According to WTTC, over the next decade, India’s Travel & Tourism’s GDP is expected to grow at an average of 7.1% annually.
*With recent developments in the hospitality infrastructure, the segment envisages directly contributing Rs. 2,60,52,000 crore (US$ 3 trillion) to the country’s GDP by 2047.
Introduction
India being one the most popular travel destinations across the globe has resulted in the Indian tourism and hospitality industry emerging as one of the key drivers of growth among the services sector in India. With recent developments in the hospitality infrastructure, the segment envisages directly contributing Rs. 2,60,52,000 crore (US$ 3 trillion) to the country’s GDP by 2047. The tourism industry in India has significant potential considering that Tourism is an important source of foreign exchange in India similar to many other countries.
It is widely acknowledged that the tourist and hospitality sector, which encompasses travel and hospitality services like hotels and restaurants, is a development agent, a catalyst for socioeconomic growth, and a significant source of foreign exchange gains in many countries. India's rich and exquisite history, culture, and diversity are showcased through tourism while also providing significant economic benefits. The consistent efforts of the central and state governments have helped the tourism industry to recover from the COVID-19 pandemic shock and operate at the pre-pandemic level.
India, with a coastline of over 7,500 kilometres, boasts 204 lighthouses that are being transformed from traditional navigational aids into tourism attractions as part of the Government of India’s developmental vision.
With a total area of 3,287,263 sq. km extending from the snow-covered Himalayan heights to the tropical rain forests of the south, India has a rich cultural and historical heritage, variety in ecology, terrains and places of natural beauty spread across the country. This provides a significant opportunity to fully exploit the potential of the tourism sector. The government has taken steps to boost investments in facilitate spiritual tourism with states like Uttar Pradesh developing tourist circuits and Uttarakhand and West Bengal enhancing infrastructure for pilgrims.
Market Size
Government initiatives, such as the @2047 Vision, aim to attract 100 million inbound tourists by 2047. The World Travel & Tourism Council (WTTC) forecasts that the sector's contribution to GDP will reach Rs. 21,15,000 crore (US$ 250.2 billion) in CY24 and could potentially grow to Rs. 43.25 crore (US$ 511.5 billion) by CY34, supporting approximately 63 million jobs.
Domestic air traffic rose to 14.0 million passengers in February 2025, surpassing February 2024 which stood at 12.6 million, DGCA data showed.
The Indian hospitality sector is expected to see a 7-9% revenue growth in FY25 and 6-8% in FY26, with pan-India premium hotel occupancy improving from 70-72% in FY25 to 72-74% in FY26. This growth is driven by strong domestic demand, including leisure, Meetings, Incentives, Conferences, and Exhibitions (MICE), and business travel (ICRA report).
The luxury travel market in India is expected to grow at rate of 9.8% during 2024-30, reaching Rs. 10,73,785 crore (US$ 123.7 billion) by CY30.
Indian airlines and hotels are progressively accommodating pet owners, experiencing a notable surge in flight and accommodation bookings, which have risen by double digits in FY25. Industry data indicates that pet-related bookings for flights and hotels have increased year-over-year by between 26% and 43%.
FTAs during CY24 were 9.70 million as compared to 9.20 million in CY23.
FEE during the period January- February 2025 were Rs. 27,736 crore (US$ 3.28 billion).
The percentage share of foreign tourist arrivals in India during October 2024 among the top five source countries was highest from USA (19.2%), followed by UK (13.8%), Canada (7.6%), Australia (4.6%) and Malaysia (3.7%).
India's wellness tourism industry is experiencing significant growth, valued at Rs. 1,64,027 crore (US$ 19.4 billion) and projected to reach Rs. 2,51,959 crore (US$ 29.8 billion) by 2031, with a CAGR of 6.5%.
In February 2024, domestic air traffic surged to 1.40 crore passengers, marking a 11.2% increase from the corresponding period last year when it stood at 1.26 crore.
The Indian travel and tourism industry is expected to record an annual growth at 7.1% per annum. In WTTC’s Economic Impact 2023 report, India’s Travel and Tourism GDP contribution grew by 5.9%.
The travel market in India is projected to reach US$ 125 billion by FY27 from an estimated US$ 75 billion in FY20. The Indian airline travel market was estimated at ~US$ 20 billion and is projected to double in size by FY27 due to improving airport infrastructure and growing access to passports. The Indian hotel market including domestic, inbound, and outbound was estimated at ~US$ 32 billion in FY20 and is expected to reach ~US$ 52 billion by FY27, driven by the surging demand from travellers and sustained efforts of travel agents to boost the market.
By 2028, international tourist arrivals are expected to reach 30.5 billion and generate revenue of over US$ 59 billion. However, domestic tourists are expected to drive the growth, post-pandemic. International hotel chains are increasing their presence in the country, and they will account for around 47% share of the tourism and hospitality sector of India by 2020 and 50% by 2022.
Cumulative FDI equity inflow in the Hotel and Tourism industry is Rs. 1,17,267 crore (US$ 18.47 billion) during the period April 2000-December 2024. This constitutes 2.57% of the total FDI inflow received across sectors.
Investments/Developments
- Sarovar Hotels is set to launch Nepal's largest hotel, featuring 304 rooms under the Royal Tulip brand, in the first half of CY25.
- India’s Union Budget FY26 has allocated Rs. 2,541.06 crore (US$ 291.07 million) to boost its tourism sector, focusing on improving infrastructure, skill development, and travel facilitation through measures like developing 50 top tourist destinations, offering MUDRA loans for homestays, enhancing connectivity, and introducing e-visa facilities.
- OYO invests Rs. 86.69 crore (US$ 10 million) to enhance G6 Hospitality’s digital assets, aiming to boost direct bookings and expand its US footprint with 150+ new hotels by 2025.
- The Maha Kumbh 2025 has become one of the largest religious gatherings in history, with over 450 million (45 crore) devotees participating in the bathing rituals as of February 11, 2025.
- In April 2024, EaseMyTrip.com launches its first franchise store in Karnal, Haryana, as part of its expansion via the franchise model, reinforcing its dedication to offering superior experiences across offline and online channels.
- As of February 2024, Ayodhya is anticipated to host between 50 to 100 hotels over the next 3 to 4 years. The city, acclaimed as a global religious destination, is primed for substantial development, with Taj Hotels poised to establish its fourth property in the area.
- In March 2024, MakeMyTrip revealed a partnership with the Department of Tourism, Madhya Pradesh, and redBus to boost tourism in the region, aiming for sustainable development and positioning Madhya Pradesh as a premier destination.
- In March 2024, Indian Hotels Corporation Ltd (IHCL) has announced plans to recruit 2,000-2,500 employees in the fiscal year 2025. This expansion of the workforce aligns with IHCL's ambitious plans, which include a pipeline of 85 hotels.
- In February 2024, Mahindra Holidays & Resorts India Ltd (MHRIL) intends to invest around Rs. 4,500 crore (US$ 541.6 million) over the next three to four years, aiming to double its room capacity to 10,000.
- In February 2024, Oberoi Realty, a real estate developer, has partnered with Marriott International, a global hospitality leader, to develop two Marriott properties in Mumbai.
- In February 2024, OYO announced its venture into sports hospitality, selecting 100 hotels across 12 cities like Delhi, Chennai, and Bangalore. The focus is on catering to large sports events by providing accommodation and services for athletes and officials.
- In February 2024, the Radisson Hotel Group announced its rapid expansion in India, securing agreements for 21 hotels across nine distinct brands in 2023.
- In February 2024, Lemon Tree Hotels intends to launch 30 new properties across the country this year, potentially increasing its room capacity by over 2,000 rooms. The hospitality chain is optimistic about the demand driven by middle-class consumers.
- In December 2023, IHCL expanded its presence in Maharashtra as it signed a hotel in Bandra, Mumbai. The Brownfield project will be branded an IHCL- SeleQtions hotel.
- In December 2023, TAJ won the ‘World’s finest luxury grand palaces’ award at the ‘101 Best Executive Summit’ in Germany.
- In November 2023, Indian Hotels Company (IHCL) announced the opening of Ginger Mumbai, Airport. The 371 Keys flagship Ginger hotel, strategically located near the domestic airport will introduce the brand’s lean luxe design and service philosophy of offering a vibrant, contemporary, and seamless hospitality experience to its guests.
- In September 2023, Easemytrip signed an MOU with the Government of Uttarakhand (UK) to invest Rs. 1,000 crore (US$ 120.16 million) and build 4-5 large marquee resorts over the next few years in Uttarakhand.
- An investment of Rs. 2,400 crore (US$ 289.89 million) was allocated to the Ministry of Tourism as the sector holds huge opportunities for jobs and entrepreneurship for youth.
- An investment-linked deduction under Section 35 AD of the Income Tax Act is in place for establishing new hotels under the 2-star category and above across India, thus permitting a 100% deduction in respect of the whole or any expenditure of capital nature.
- An app will be developed covering all relevant aspects of tourism. States will be encouraged to set up Unity Malls in State Capital as the most prominent tourism centres to promote One District One Product, GI products, handicrafts, and products of other States.
- In 2021, Government of India announced 40,000 e-tourist visas out of 500,000 free regular visas to the tourist, to ensure a geographical spread of the incentive to important source markets globally.
- Government of India has set a target to create 220 new airports by 2025.
- The Emergency Credit Line Guarantee Scheme (ECLGS) covered through a liberal definition of MSME (micro small and medium enterprises) has been expanded to include tourism and hospitality stakeholders. Infrastructure status has been granted to exhibition-cum-convention centres.
- A separate liquidity window of Rs. 15,000 crore (US$ 1.8 billion) has been released for the sector.
- A total of 48,775 accommodation units (both classified and unclassified) have been registered on the National Integrated Database of Hospitality Industry (NIDHI) portal and 11,220 units have self-certified for SAATHI standards in September 2022.
- In October 2022, Indian Hotels Company (IHCL) announced the launch of its new Indian-concept restaurant brand, Loya. Debuting at Taj Palace, New Delhi, Loya captures the culinary essence traversing the landscape of North India.
- Hospitality unicorn OYO has acquired Europe-based vacation rental company Direct Booker for US$ 5.5 million in May 2022.
- Accor, a French hospitality major will expand its India's portfolio by adding nine additional hotels in the mid-scale and economy categories, bringing the total number of hotels 54 in India.
- The Medical Tourism sector is expected to increase at a CAGR of 21.1% from 2020-2027.
- Indian government has estimated that India would emerge with a market size of 1.2 million cruise visitors by 2030-31. Dream Hotel Group plans to invest around US$ 300 million in the next 3-5 years for the development of the cruise sector in India.
Government Initiatives
The Ministry of Tourism has undertaken Destination Based Skill Development training programme at various places in the country to train, local people residing near the tourist sites and destinations. Around 12,187 candidates have been trained at 145 destinations.
The Ministry of Tourism has approved 46 projects under its PRASHAD Scheme, including three in Andhra Pradesh. Additionally, 29 sites have been identified for development under this scheme, with two located in Andhra Pradesh.
The Indian Government has realised the country’s potential in the tourism industry and has taken several steps to make India a global tourism hub. Some of the major initiatives planned by the Government of India to boost the tourism and hospitality sector of India are as follows:
The Ministry of Tourism launched the Swadesh Darshan Scheme to develop theme-based tourist circuits, sanctioning 76 projects. Upgraded to Swadesh Darshan 2.0 (SD2.0), it targets sustainable tourism, selecting 57 destinations for development, with States/UTs preparing plans accordingly.
The Prime Minister Mr. Narendra Modi inaugurates and unveils 52 tourism sector projects valued at over Rs. 1400 crore (US$ 168.5 million) under the Swadesh Darshan and PRASHAD Scheme.
Ministry of Tourism has partnered with the Quality Council of India (QCI), to assist the Hospitality Industry in their preparedness to continue operations safely and mitigate risks arising out of the COVID-19 pandemic through an initiative called SAATHI (System for Assessment, Awareness and Training for Hospitality Industry). A hotel/unit goes through the SAATHI framework and agrees to fully follow the requirements wherever applicable possible, and a self-certification is issued. Self-certified Hotel/units attend webinars to clarify doubts through live interactions. If Hotel/unit desires, they may undertake site-assessment based on SAATHI framework through QCI accredited agencies and an assessment report with opportunities for improvement is shared with the assessed unit.
Under this Loan Guarantee Scheme for Covid Affected Tourism Service Sector (LGSCATSS), loan up to US$ 12,110 will be extended to each Tour Operators/ Travel Agents/ Tourist Transport Operators approved/recognized by the Ministry of Tourism.
Guarantees for Skill Development Loans by the member banks of IBA up to Rs. 1.5 lakh (US$ 1,801) extended by lending institutions to eligible borrowers without collateral or third-party guarantee.
- Visa reforms include a significantly expanded Golden Visa scheme, a five-year Green residency and new entry permits, including one for job seekers. The new system also offers additional benefits to sponsor family members
- To ease travels for international tourists, the Government of India has launched a scheme wherein five lakh tourists will get free visas.
- In August 2022, Ministry of Tourism sanctioned 76 projects for Rs. 5,399.15 crore (US$ 678.39 million) under Swadesh Darshan Scheme for development of tourism infrastructure in the country.
- In June 2022, the Ministry of Tourism along with Associations of Indian Universities (AIU) initiated a 12-episode webinar series under ‘Azadi Ka Amrut Mahotsav’ (AKAM) to engage and expose young minds of our country to the rich and diverse heritage of the country.
- Till the end of September 2022, a total of 155 Dekho Apna Desh webinars have been organized by Ministry of Tourism.
- The Ministry of Tourism has launched the National Strategy for Sustainable Tourism and Responsible Traveller Campaign in June 2022.
- Government is planning to boost the tourism in India by leveraging on the lighthouses in the country. 71 lighthouses have been identified for development as tourist spots.
- The Ministry of Road Transport and Highways has introduced a new scheme called ‘All India Tourist Vehicles Authorisation and Permit Rules, 2021’, in which a tourist vehicle operator can register online for All India Tourist Authorisation/Permit. This permit will be issued within 30 days of submitting the application.
- The Indian Railway Catering and Tourism Corporation (IRCTC) runs a series of Bharat Darshan tourist trains aimed at taking people to various pilgrimages across the country.
- Ministry of Tourism sanctioned 18 projects covering all the Northeastern States for Rs. 1,456 crore (US$ 211.35 million) to develop and promote of tourism in the region under Swadesh Darshan and PRASHAD schemes.
State Government Initiatives
- In Jammu and Kashmir, in April 2021, a mega tourism promotion event “Tapping the Potential of Kashmir: Another Day in Paradise” was organised in Srinagar. The event aimed to showcase the myriad tourism products of Jammu & Kashmir and promote tourism in the region as the destination for leisure, adventure, eco, wedding, films and MICE tourism steps have been taken by the government to provide better facilities to the old.
- The strategy of Uttarakhand Tourism is to identify key originating regions and tourist segments, which would then be the focus of marketing campaigns.
- Madhya Pradesh tourism board has opened the door for private investment within the state by providing all the aid and facilities to the investors.
- The AP Tourism Development Corporation (APTDC) plans to establish 100 kiosks across the state in the first phase, providing employment opportunities to the youth.
- In October 2021, the Tripura government collaborated with Infovalley Educational & Research (P) Ltd. as part of a public-private partnership (PPP) to run the State Institute of Hotel Management (SIHM). Through the SIHM, the government aims to empower the youth and contribute to the growth of hotels and hospitality management in the state.
- The Ministry of Tourism sanctioned three projects for a total amount of Rs. 179.68 crore (US$ 24.24 million) under the Swadesh Darshan scheme in Gujarat. The Ministry of Tourism has approved 16 projects for over Rs. 1,300 crore (US$ 171.2 million) in India's Northeast under the “Swadesh Darshan” Scheme.
Road Ahead
Staycation is seen as an emerging trend were people stay at luxurious hotels to revive themselves of stress in a peaceful getaway. To cater to such needs, major hotel chains such as Marriott International, IHG Hotels & Resorts and Oberoi hotels are introducing staycation offers where guests can choose from a host of curated experiences, within the hotel. India’s travel and tourism industry has huge growth potential. The industry is also looking forward to the expansion of e-Visa scheme, which is expected to double the tourist inflow in India. India's travel and tourism industry has the potential to expand by 2.5% on the back of higher budgetary allocation and low-cost healthcare facility according to a joint study conducted by Assocham and Yes Bank.
It is irrefutable that the tourist industry is becoming a more significant economic force and has the potential to be used as a tool for development. The tourist industry not only drives growth, but it also raises people's standards of living with its ability to provide significant amount of diverse employment opportunities. It promotes environmental preservation, champions diverse cultural heritage, and bolsters international peace. By 2028, Indian tourism and hospitality is expected to earn US$ 50.9 billion as visitor exports compared with US$ 28.9 billion in 2018.
Note: *in US$ terms
Note: Conversion rate used in April 2025, Rs. 1 = US$ 0.012
References: Media Reports, Ministry of Tourism, Press Releases, Department for Promotion of Industry and Internal Trade (DPIIT), Press Information Bureau (PIB), Union Budget 2023-24, Economic Survey 2022-23
Related News
MOREStates with Largest Domestic Tourist Arrivals in 2021
- Tamil Nadu
- Uttar Pradesh
- Andhra Pradesh
- Karnataka
- Maharashtra
- Telangana
Posters
MORE
ANCIENT AND RICH
Approximately 8000 years old, India is the world's oldest surviving civilsation.
IBEF Campaigns
MORE
Aatmanirbhar Bharat Utsav 2024
Union Minister of External Affairs, Dr. S. Jaishankar and Union Commerce an...
Case Studies
MOREFuelling Growth: How India’s Petrochemical Industry is Powering Economic Transformation
Petrochemicals are the unsung heroes of the modern industrial economy. Derived primarily from hydrocarbons such as natural gas and crude oil, these ch...
Scooping Success: Analysing Growth, Trends and Opportunities in India's Ice Cream Industry
India’s ice cream industry has undergone a remarkable transformation over the past few decades—from a largely seasonal and unorganised seg...
The Talent Tsunami: Harnessing India’s Demographic Dividend for Global Impact
The demographic dividend has put India on the verge of change. Defined as the economic growth potential arising from a favourable age structure within...
IBEF BLOG
MORE
BharatNet Unplugged: Transforming Rural Connectivity in India
Digitalisation is playing an important role in the development and evolutio...
Fast-Tracking Growth: The Evolution of India's Express Logistics and Parcel Market
Rapid technical breakthroughs, changing customer expectations and strong go...
Empowering Districts, Empowering India: The ODOP Revolution
Every district in India is celebrated for its own unique product – on...
Partners
