Potential of Indian Tourism

Dec, 2020 - by CMI

Potential of Indian Tourism

India has always been a favorite destination for overseas visitors and there has been a steady rise in inbound tourism.

India is one of the oldest civilizations in the world with a kaleidoscopic variety and rich cultural heritage. During the past 65 years of its independence, it has made socio-economic growth. In agricultural development, India has become self-sufficient and is now one of the world's top developed countries and one of the few nations to have entered outer space to conquer nature for the good of the planet. It occupies an area of 32,87,263 sq. Km, stretching from the snow-covered heights of the Himalayas to the southern tropical rain forests. India offers a broad range of tourist destinations, diverse in terms of land and nature, people, tribes, cuisine, religions, dance styles, music, arts, crafts, adventure, sport, spirituality, and history. As a destination for spiritual tourism for foreign and domestic visitors, India has been recognized.

The Indian tourism and hospitality industry

The Indian tourism and hospitality industry has evolved as one of the crucial drivers of economic growth and development in the country. Tourism is an integral pillar of the Make in India program. India provides geographical diversity, sites of world heritage, and items of niche tourism such as cruises, adventure, medical, eco-tourism, etc. Incredible India has fueled tourist arrivals and employment growth. Tourism plays the role of a significant economic multiplier and its role becomes critical since India has to grow at rapid rates and create jobs. Indian tourism is classified into four main categories, North Indian, East Indian, West Indian, and South Indian Tourism. From scenic beauty to ancient cultural heritage, various parts of the country give diverse experiences. All these mesmerize the international tourists and inspire them to discover more of India. Apart from generating revenue for the country, travel, and tourism also provides millions of people with direct and indirect employment opportunities. Given the rich cultural and historical heritage, rich biodiversity, and places of natural beauty spread across the country, the industry has considerable potential. Besides being a significant source of foreign exchange, tourism is a viable investment and a potentially large producer of jobs. Due to its scenic beauty, which stretches from Kashmir in the north to Kanyakumari in the south and Arunachal Pradesh in the east to Gujarat in the west, and multiculturalism, many people from all over the world are drawn towards India. For example, apart from Imambara, there are many restaurants where Nawabi cuisine is well served, and it is also popular for its Chikan Embroidery work, as well as the monument in Lucknow. In recent years, data indicates the number of domestic tourist traffic has increased significantly and some of the reasons behind this is better road connectivity, the evolving lifestyle of people, higher disposable income of the middle-class segment, etc. Similarly, for foreigners, India has become an attractive & affordable holiday destination.

  • According to the World Economic Forum’s travel and tourism index, in 2019, India jumped to 34th position in 2019 from 65th position in 2013. According to the India Brand Equity Foundation (IBEF), in 2020, 40 million jobs were created in the tourism sector in India, which is 8% of the total employment in the country.
  • According to Invest in India, in April 2019, 20.1137 billion arrived on e-Tourist Visa as compared to 15.70 billion during the month of April 2018 with a growth of 28%. Furthermore, according to the same source, during the period January-April 2019, there were 393.52 billion visitors as compared to January-April 2018.
  • According to the World Travel and Tourism Council (WTTC), India ranked third amongst 185 countries in terms of travel and tourism’s total contribution to the country’s GDP. Tourism generated US$ 194 billion, which is 6.8% of India’s GDP in 2019.
  • Although the tourism sector is booming, it lags behind if we compare it to some developed countries due to various reasons.

A major challenge in Indian tourism is the lack of infrastructure. This includes hotels, links with other towns, health services, transport, etc. A weak distribution of money in the budget is the key explanation for this disquiet. Another reason is safety and security. Safety & security of tourists is the most important factor, which governs whether people will come to that destination or not. The tourism sector should become strict and should pass laws against those criminals who cheat innocent tourists. Another reason is the inaccessibility. There are many tourist destinations in the country that are not available to the poor, women, and the elderly due to high transportation costs and poor urban connectivity. According to the World Economic Forum, 2% of visitors are unable to visit many of the country's tourist spots.

There has been a lot of investments made in India's Tourism and hospitality sector.

According to Invest India, Foreign Direct Investment (FDI) inflow in hotel and tourism in India from April 2000 to September 2020 was US$ 15.53 billion.

In April 2019, the U.S. company Airbnb invested US$ 75 million in SoftBank-backed hospitality company Oyo to give it access to Airbnb's global and Indian user base for travelers.

In August 2020, the town of Ayodhya is one of the most important religious places in the world, with direct connections from Lucknow, Varanasi, and other religious places in the nearby areas provided by Indian Railways. The Ayodhya Circuit is likely to be the greatest tourist hub in the country in the near future.

In August 2020, the Thenzawl Golf Resort project was inaugurated in Mizoram. A total of US$ 922.5 million was approved for the project, of which US$ 644 million was approved for various components at Thenzawl, including the Golf Course. Union Minister of State for Culture and Tourism (Independent Charge) Shri Prahlad Singh Patel virtually inaugurated the ‘Thenzawl Golf Resort’ Project implemented under the Swadesh Darshan Scheme of Ministry of Tourism. The Project was sanctioned under the Integrated Development of New Eco-Tourism under Swadesh Darshan- North East Circuit at Thenzawl and South Zone, District Serchhip and Reiek. Golf tourism, in India particularly, has a strong potential since the climatic condition is more favorable here as compared to most countries.

  • In August 2020, Guwahati had its first ropeway over the river Brahmaputra in Assam. It is the longest ropeway in India and is expected to become a significant tourist spot in the state. The Passenger Ropeway Project connects Guwahati North to Guwahati City, covering a distance of 1.8 km.
  • In November 2020, the Ministry of Tourism inaugurated a tourist facilitation center in Guruvayur, Kerala under the PRASHAD scheme.
  • In December 2020, The Indian Hotels Company (IHCL), which operates the Taj Hotels Chain, partnered with Ambuja Neotia Group, a real estate company, to launch three new hotels, two in Kolkata, West Bengal, and one in Patna, Bihar. These five ventures will account for 500 rooms cumulatively. To launch these five properties, Ambuja Neotia Group is investing US$ 8 billion.  

There were many government initiatives taken for the Indian tourism sector to revive. According to India Brand Equity Foundation (IBEF), in June 2020, the Ministry of Tourism launched Dekho Apna Desh webinar series to provide information on many destinations and sheer depth on the culture and heritage of India. In October 2018, the statue of Sardar Vallabhbhai Patel, also known as ‘Statue of Unity’, was inaugurated. It is the highest standing statue in the world at a height of 182 meters. It is expected to boost the tourism sector in the country and put it on the world tourism map. In 2019, the government reduced GST on hotel rooms with tariffs of US$ 14.32 to US$ 107.31 per night to 12% and those above US$ 107.32 to 18% to increase India’s competitiveness as a tourism destination.

Under Budget 2020-21, the Government of India allotted US$ 171.70 million for the development of tourist circuits under Swadesh Darshan for eight Northeast states.

In August 2020, The Ministry of Culture announced seven new circles of Archaeological Survey of India. The Union Minister of State for Culture and Tourism Shri Prahalad Singh told Madhya Pradesh, Tamil Nadu, Uttar Pradesh, Karnataka, West Bengal, and Gujarat that new circles had been established. He said that the new circles had been declared as Trichy, Raiganj, Rajkot, Jabalpur, Jhansi & Meerut. The Hampi City in Karnataka is a place of international repute in Archaeology, so the Hampi Mini Circle has been turned into a full-fledged circle, the Minister added. There had been 29 ASI circles around the country earlier.

India can revive its tourism sector through various strategies. To reverse the effect of the coronavirus crisis on tourism in India, the travel and hospitality industry needs financial assistance. With travel coming to an unprecedented halt, it is unlikely that businesses in this industry will be able to repay loans on strict terms. Instead, flexible lending programs can help travel and tourism companies financially after taking into account their paying capacity. For companies in this market, an expansion in the moratorium period could also be beneficial. Apart from governmental and lending aids, another development that could help the tourism sector recover is domestic travel. While international travel may not pick up significantly in the near future, domestic tourism could show signs of improvement once the lockdown and other restrictions are lifted. By focusing on domestic travel, the tourism industry could cash in on this area and begin its journey towards recovery.