Tourism as India’s Growth Engine | 20 Aug 2025

Source:BS 

Why in News?

Following the 50% US tariffs imposed on Indian goods, experts such as former NITI Aayog CEO Amitabh Kant have suggested that tourism could help offset potential losses by attracting high-value tourists, since tourism is free from tariff barriers. 

What is the Potential of India’s Tourism Sector? 

• India’s Tourism: The tourism sector in India has regained its pre-pandemic momentum, contributing 5% to GDP in FY23 and creating 7.6 crore jobs. 
  • India recorded 9.95 million foreign tourist arrivals (FTAs) in 2024 but still below pre-pandemic levels. Foreign Exchange Earnings (FEEs) grew 10% in 2024 to Rs 2.9 lakh crore compared to 2023, reinforcing tourism’s role in jobs, revenue, and global standing. 
  • India accounts for 1.5% of international tourist arrivals. According to the World Travel and Tourism Council (WTTC) 2024-25 report, India is the 8th largest tourism economy, contributing USD 231.6 billion. 
  • India ranked 10th out of 46 destinations in the Medical Tourism Index (2020–21) released by the Medical Tourism Association. 
• Key Source Markets: Between 2020 and 2024, US, Bangladesh, United Kingdom, Australia, Canada, Malaysia, Sri Lanka, Germany, and France emerged as the top source countries for India’s foreign tourist arrivals. 
  • Travel purposes are mainly leisure (46%), diaspora visits (27%), and business travel (10%). 
• Future Growth: The WTTC has projected that the travel and tourism sector will contribute almost Rs 42 trillion to India’s economy by 2035, supporting 64 million jobs. 
  • By 2028, FTAs are expected to rise to 30.5 million, generating over Rs 5.13 lakh crore in revenue. 
  • By 2047, India aims to become a USD 3 trillion tourism economy, attracting 100 million international tourists, 20 billion domestic trips, and creating 200 million tourism-related jobs. 

What are the Challenges Hindering the Growth of Indian Tourism? 

• Visa and Travel Hurdles: Paper-based processes, complex approvals, limited visa-free access make FTAs entry difficult.  
  • For example, only citizens of Bhutan, Nepal, and Maldives can travel to India without a visa, whereas China allows 70 countries and Thailand 90 countries visa-free access. 
• Poor Infrastructure: Limited hotel rooms and weak transport networks reduce tourist comfort.  
  • India has around 200,000 hotel rooms, compared to China’s 20 million. Many government-run hotels operate at a loss, discouraging investment. 
• Lack of Cleanliness: Inadequate waste management and untidy surroundings near airports and public areas leave poor first impressions on visitors, especially when compared to cleaner international tourist destinations. 
• Safety Concerns: Inadequate security and emergency services pose risks to tourists, particularly in remote or high-traffic areas. 
• Low Global Promotion: India lacks a strong, ongoing international marketing campaign. Past initiatives like “Incredible India” were successful, but no major campaign has run in the last decade. 
  • As of July 2025 India has 44 UNESCO World Heritage Sites while Greece has around half, but attracts three times more tourists. This highlights underutilization of cultural assets, weak global branding, poor visitor facilities, and limited promotion, making it harder for India to attract high-value tourists. 
• Urban and Connectivity Gaps: Difficult access to remote or high-potential destinations reduces tourist inflow.  
  • Regions like the Himalayan religious circuits remain underdeveloped in terms of roads, airports, and accommodations. 

How can India Attract High-Value Tourists? 

• Simplify Entry and Travel: Expanding e-Tourist Visa and visa-on-arrival to more countries, while making them faster and cheaper, can boost arrivals.  
  • For high-value tourists, seamless travel through better airports, quicker immigration, and multilingual support is essential. 
• Promote Unique, Premium Experiences: Promote Niche Tourism like Ayurveda retreats, luxury wildlife safaris, spiritual wellness tours, high-end cultural festivals, and river cruises. These attract tourists willing to pay more. 
  • Lakshadweep, with its pristine beaches, coral reefs, and clear waters, holds immense promise as a high-value tourist destination. With sustainable tourism practices and carefully planned infrastructure, the islands can become a premier hotspot. 
  • Invite influencers, travel writers, and opinion leaders for luxury experiences that build aspiration and word-of-mouth. 
• Showcase Destination Diversity with Circuits: Schemes like Swadesh Darshan and PRASAD can be used to package experiences into premium itineraries, such as the Buddhist Circuit for international pilgrims, a luxury Himalayan Circuit combining wellness and adventure, and Spiritual Circuits with upgraded PRASAD sites.  
  • These initiatives transform India from a single-site destination into a multi-day immersive journey, encouraging longer stays and higher spending by tourists. 
• World-Class Infrastructure and Connectivity: The initiative to develop 50 top tourist destinations through challenge-mode partnerships with states ensures premium facilities, luxury hotels, and seamless connectivity. 
  • Classifying hotels under the Infrastructure Harmonized Master List (HML) will draw private investment into high-end hospitality, crucial for attracting affluent travelers. 
• Upgrade Service Quality: High-value tourists want comfort. More focus on training manpower in hospitality (chefs, guides, service staff) is key. 
  • Encourage global-standard hotels, boutique stays, luxury trains, and cruises. 
• Medical and Wellness Tourism: The Heal in India initiative, blending modern medicine with Ayurveda, Yoga, and wellness, positions India as a global healthcare hub.  
  • With Medical Value Travel projected at USD 13.42 billion by 2026, India can attract affluent patients seeking holistic, high-quality care. 
• Knowledge as Value Additions: Initiatives like the Gyan Bharatam Mission (digitizing manuscripts, preserving heritage) can support cultural tourism aimed at scholars, and global heritage enthusiasts. 
  • Strengthen Safety and Comfort: 24x7 helplines, tourist police, welcome booklets, and multilingual guides can build trust and attract more tourists. 

Conclusion 

Tourism offers India a tariff-free path to resilience by creating jobs, earning foreign exchange, and strengthening global branding. With ‘Seva’ and ‘Atithi Devo Bhava’ as guiding values, India can redefine its tourism landscape and emerge as a world-class destination by 2047.