Advantage India
Robust
Demand
*WTTC has revealed that international visitor spend in India reached a record Rs. 3,10,000 crore (US$ 36.05 billion) in 2024.
*India’s expanding middle class and young, digitally engaged population are positioning the country as a key driver of global leisure travel growth, according to a report published by BCG in June 2025.
*Indian hotels are tapping into the wellness tourism boom, with wellness tourism projected to be a US$ 1.3 trillion global market by 2025. In India, wellness tourism is growing strongly driven by health awareness and lifestyle shifts post-pandemic, with a focus on wellness packages that have boosted occupancy by 36% in some properties.
Attractive
Opportunities
*India offers geographical diversity, world heritage sites and niche tourism products like cruises, adventure, medical, eco-tourism, etc. Incredible India has spurred growth in tourist arrivals and employment.
*New GST reforms were implemented in India aimed at making travel more affordable, especially for budget and mid-range segments. The reforms reduced taxes on hotels, domestic flights, dining, and tourism activities, resulting in an expected boost in domestic travel and tourism entrepreneurship.
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.
* As of January 2025, the Ministry of Tourism sanctioned 52 projects under Swadesh Darshan 2.0 and 36 under CBDD, plus 40 large projects under SASCI.
* UDAN’s third round added 106 tourism routes, with 53 operational by January 31, 2025, and plans to link 120 destinations serving 40 million passengers in the next decade.
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 the Skift+FICCI report (March 2025), cultural and heritage tourism motivates 59% of international travelers to India. This segment has an estimated revenue potential of US$ 21.9 billion as of 2025.
* According to the Skift+FICCI report (March 2025), culinary tourism motivates 56% of travelers to India. The segment’s revenue potential is estimated at nearly Rs. 1,83,771 crore (US$ 21 billion), closely rivaling cultural tourism.
Introduction
India is one of the most popular travel destinations in the world, and its tourism and hospitality industry has emerged as a key driver of growth within the services sector. With continued investments in infrastructure, the segment is projected to contribute Rs. 2,60,52,000 crore (US$ 3 trillion) to the country’s GDP by 2047. Tourism also serves as a major source of foreign exchange for India, similar to many other economies, while supporting employment and entrepreneurship across the country.
The sector plays a dual role as both a development catalyst and a driver of socioeconomic growth. It encompasses a wide range of services, from hotels and restaurants to leisure and cultural experiences, while showcasing India’s rich history, traditions, and diversity to the world. India’s vast geography of 3.28 million sq. km, stretching from the Himalayan peaks to southern rainforests, offers a unique blend of heritage, natural beauty, and ecological variety that strengthens its global tourism appeal.
The government has placed strong emphasis on tapping this potential. Initiatives such as promoting lighthouse tourism under Maritime India Vision 2030 and Amrit Kaal Vision
2047 are already underway, with Rs. 60 crore (US$ 7 million) being invested to develop 75 lighthouses with modern amenities such as museums, amphitheatres, and parks. Similarly, spiritual tourism is being expanded through dedicated circuits in Uttar Pradesh and enhanced infrastructure in states like Uttarakhand and West Bengal, combining heritage with modern connectivity.
Market Size
Government initiatives such as the Vision@2047 aim to attract 100 million inbound tourists by 2047, reinforcing India’s position as a global tourism hub. According to the World Travel & Tourism Council (WTTC), the sector’s contribution to GDP is projected to rise from US$ 256 billion in CY24 to US$ 523 billion in CY34, supporting about 63 million jobs. WTTC also forecasts another record-breaking year in 2025, with the industry expected to contribute over Rs. 22,00,000 crore (US$ 257.40 billion) and employment set to exceed 48 million.
Tourism supported 46.5 million jobs in 2024, accounting for 9.1% of India’s employment, and is projected to reach nearly 64 million jobs by 2035. The industry continues to expand across multiple segments, from medical and wellness to luxury and pet-friendly travel. India registered 1,31,856 foreign tourist arrivals (FTAs) for medical purposes between January and April 2025, representing 4.1% of total arrivals. Meanwhile, the wellness tourism industry, valued at Rs. 1,64,027 crore (US$ 19.4 billion) is projected to reach Rs. 2,51,959 crore (US$ 29.8 billion) by 2031 at a CAGR of 6.5%. The luxury travel market is also expanding rapidly and is expected to grow at 9.8% annually during 2024-30, reaching US$ 123.7 billion by CY30.
In CY24, Foreign Tourist Arrivals stood at 9.70 million compared to 9.20 million in CY23. During January-March 2025, FTAs reached 26.1 lakh, with another 6.26 lakh arrivals in April alone. The top source countries were the USA (16.3%), UK (13.5%), Australia (6.1%), Canada (4.8%), and Bangladesh (4.6%). Foreign exchange earnings during January-March 2025 totalled Rs. 78,715 crore (US$ 9.09 billion).
Domestic tourism continues to drive growth, with visitor spending reaching Rs. 15,50,000 crore (US$ 185.6 billion) in 2024, 22% higher than pre-pandemic levels, and expected to rise to Rs. 16,80,000 crore (US$ 200.17 billion) in 2025. International visitor spending also grew, rising to Rs. 3,10,000 crore (US$ 36.8 billion) in 2024 and projected to touch Rs. 3,20,000 crore (US$ 37.47 billion) in 2025.
Air travel and hospitality are equally buoyant. Indian airlines carried more than 1.36 crore passengers in June 2025, while the airline market, valued at around US$ 20 billion, is projected to double by FY27 due to improving airport infrastructure and greater passport access. The hotel industry, estimated at US$ 32 billion in FY20, is expected to grow to US$ 52 billion by FY27, supported by strong demand from domestic and international travellers. Premium hotel occupancy is projected to improve from 70-72% in FY25 to 72-74% in FY26, with revenue growth of 7-9% in FY25 and 6-8% in FY26.
Emerging trends such as pet-friendly travel are also shaping the market, with bookings for flights and accommodations involving pets rising between 26% and 43% year-on-year in FY25. Overall, India’s travel and tourism industry is expected to grow at 7.1% annually, fuelled by rising disposable incomes, diverse offerings, and steady foreign investments. From April 2000 to June 2025, cumulative FDI inflows into the hotel and tourism industry stood at Rs. 1,17,787 crore (US$ 13.78 billion), accounting for 2.51% of total FDI inflows across sectors.
Investments/Developments
- As per provisional National Accounts Statistics 2025 estimates, the tourism sector contributed is Rs. 1,19,747 crore (US$ 18.76 billion) to India's GDP. This reflects the sector's strong economic role in India.
- India's tourism and hospitality sector poised to reach nearly US$ 60 billion by 2028, driven by domestic and international traveler spending expected to triple by 2034. Domestic air travel is projected to more than double by 2030, increasing demand for quality accommodations.
- On October 31, 2025, Goa's tourism sector saw a 6.23% rise in tourist arrivals during the 2025-26 season, with new international flights and sustainable tourism policies boosting arrivals, as reported by the local tourism minister.
- India recorded approximately 56 lakh foreign tourist arrivals till August 2025. Domestic tourism is also strong, with over 303 crore domestic tourist visits. Various thematic circuits developed under government schemes like 'Swadesh Darshan' are enhancing leisure tourism options such as cultural, coastal, and tribal circuits.
- Indian overseas travel data shows a sharp uptick in leisure travel by Indians abroad, with leisure travel making up 42.52% of foreign departures by Indians in 2024. This underscores leisure travel as a growing segment both inbound and outbound for India.
- Domestic tourism has become the cornerstone of India's hospitality growth, contributing nearly 88% of total tourism spending. Urban Indians increasingly prefer shorter, experience-led breaks like wellness and adventure tourism. This regional travel focus is expanding new markets in Tier-II and Tier-III cities and driving infrastructure development.
- A joint report by the Ministry of Tourism and NITI Aayog estimates wellness tourism alone could contribute US$ 18 billion to India's GDP by 2030, highlighting growth in specialized tourism segments.
- India's intercity bus industry experienced a 25% YoY growth in the H1 of FY26, carrying over 140 million passengers between April and September 2025. This growth is attributed to the expansion of route networks, digital ticketing, and higher demand for comfort features like AC and sleeper buses, especially from tier-II and tier-III towns driving new travel patterns. Maharashtra remains the largest bus travel market, demonstrating higher ticket prices and occupancy rates above the national average.
- India's hotel market is shifting to rate-led growth supported by infrastructure expansion and growing domestic tourism. The sector attracted US$ 340 million in hotel transactions in 2024, making India the second-largest hotel investment market in Asia Pacific, with over 690 new hotel projects underway.
- India’s medical tourism market, valued at US$ 7.7 billion in 2024, is projected to reach US$ 16 billion by 2030. The sector has seen significant private investment inflows and plans to add 34,000 new hospital beds by 2029, enhancing capacity for international patients.
- OYO announced in January 2025 plans to add 500 new hotels in India's religious tourism hubs by the end of the year, including destinations like Ayodhya, Varanasi, and Haridwar, to meet the rising demand from pilgrims.
- 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.
- 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.
- 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.
GST reduction on hotel stays under Rs. 7,500 (US$ 84.6) to 5% is expected to fuel growth in the hospitality sector, boosting domestic travel and helping India move towards a US$ 1 trillion hotel industry contribution to GDP by 2047.
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.
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.
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.
- 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
- Telangana's tourism sector attracted Rs. 15,000 crore (US$ 1.69 billion) investments across 31 projects under its new Tourism Policy (2025–2030). Initiatives include developing tourism clusters and positioning Hyderabad as a weekend tourism capital catering to IT professionals' travel demand.
- Andhra Pradesh is expected to announce major tourism investments including a Foreign Direct Investment (FDI) MoU worth Rs. 1,860 crore (US$ 209.77 million), projected to create 12,500 new jobs.
- 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 FY25 under the SASCI scheme, Gujarat secured Rs. 99.50 crore (US$ 11.6 million) for an ecotourism destination at Mokarsagar, Porbandar, and Rs. 51.56 crore (US$ 5.9 million) for a tented city and convention centre at Dhordo.
Road Ahead
Staycations have emerged as a strong trend in India, with people increasingly choosing luxurious hotels for peaceful getaways and stress relief. To meet this growing demand, leading hotel chains such as Marriott International, IHG Hotels & Resorts, and The Oberoi Group are offering curated staycation packages that blend relaxation with premium in-house experiences. Similarly, wellness tourism and pet-friendly travel are gaining traction, reflecting a shift in consumer preferences toward personalized and experience-driven tourism.
India’s travel and tourism industry holds immense growth potential, supported by government initiatives such as the expansion of the e-Visa scheme, spiritual tourism circuits, and Vision@2047, which targets 100 million inbound tourists by 2047. According to a joint study by Assocham and Yes Bank, the industry could expand by 2.5% annually, aided by higher budgetary allocations and India’s competitive advantage in affordable healthcare. The rise of medical and wellness tourism further strengthens India’s position as a global hub, with the wellness segment alone expected to grow to nearly US$ 30 billion by 2031.
Beyond its economic contribution, tourism is increasingly recognized as a driver of inclusive development. The sector not only generates diverse employment opportunities, expected to exceed 48 million jobs in 2025 and nearly 64 million by 2035, but also contributes to cultural preservation, environmental sustainability, and international goodwill. By 2028, the Indian tourism and hospitality industry is projected to reach US$ 50.9 billion compared with US$ 28.9 billion in 2018, reinforcing its role as a vital pillar of India’s service economy.
Note: Conversion rate used in October 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
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