Tourism Sector in India – A Key Driver of Growth

Context

Tourism is being increasingly viewed as the major engine of economic growth, employment generation, foreign exchange earnings, cultural preservation, long term stability and national integration especially in sensitive regions such as Kashmir.

What is the Tourism Sector?

1. Tourism includes travel for leisure, adventure, medical treatment, pilgrimage, wellness, etc.
2. It covers a wide ecosystem including hospitality (hotels, homestays), transport (air, rail, road), tour operators & guides and local services & cultural experiences.
3. It is not a single industry but a multi-sectoral economic activity.

Contribution of Tourism in India

1. GDP Contribution: About 5-6% of India’s GDP, expected to rise to 7.6% by 2034 (World Travel & Tourism Council).
2. Employment Generation: In FY 2023, it generated 7.6 crore jobs. It has a strong capacity to absorb semi-skilled and unskilled labour and support informal sector workers such as drivers, artisans, and vendors.
3. Foreign Exchange Earnings: India earned approximately $28 billion in FY 2023 from this sector. India ranks 14th globally in tourism receipts. Major tourist source countries: USA, Bangladesh, UK, Australia and Canada.
4. Broader Developmental Contributions: Tourism also supports:
   1. Cultural preservation (e.g., Adopt a Heritage Scheme)
   2. National integration (Dekho Apna Desh campaign)
   3. Inclusive growth in Tier-2 and Tier-3 cities and tribal belts. (Example: Udaipur palaces converted into hotels and promotion of homestays in tribal regions)
   4. Security dimension: Creating sustainable livelihoods in sensitive regions reduces vulnerability to extremism.

Performance Challenges – The “Three I’s”

Despite high potential, India underperforms compared to Singapore and Thailand, mainly due to the three I’s:

1. Image
   1. Perception of India as unsafe, especially for women.
   2. Issues of harassment, scams, beggars, and overcharging tourists.
   3. Poor sanitation highlighted even by the Union Finance Minister at Hampi.
   4. Incidents like forced photography in Goa and Mumbai harm global reputation.
2. India (Service Ecosystem Problems)
   1. 40% manpower shortage in hospitality due to seasonal employment.
   2. Trained staff migrate to sectors with stable income.
   3. Service quality is often not tourist-friendly.
   4. Limited visa-on-arrival (currently only for countries like Japan, South Korea, UAE).
   5. Rickshaw overcharging and lack of professionalism erode trust.
3. Infrastructure
   1. 41% stakeholders cited infrastructure as the biggest barrier (Tourism Ministry Assessment 2023).
   2. Poor last-mile connectivity and lack of multimodal logistics.
   3. Garbage near monuments (e.g., Taj Mahal).
   4. Poor public toilets cause health risks, especially for women.
   5. Weak internet connectivity.
   6. Poorly maintained heritage sites.

Government Measures

1. Infrastructure & Connectivity: Amrit Bharat Station Scheme (modernising railway stations) and UDAN Scheme (affordable air travel and improved last-mile connectivity).
2. Niche Tourism Promotion: Swadesh Darshan & PRASHAD – religious, wellness, medical, and adventure tourism.
3. Branding & Promotion: Incredible India 2.0 and Find the Incredible You (storytelling through real tourist experiences such as yoga and wellness campaigns).
4. Safety & Facilitation: Atithi Devo Bhava (24×7 multilingual tourist helpline) and Incredible India helpline (pilot).
5. Skill Development: Incredible India Tourist Facilitator Programme and Tourist Guide Certification Programme.
6. Fiscal Support: GST reduced:
   1. Hotels below ₹7,500/day: 12% → 5%
   2. Tourist buses (>10 seats): 28% → 18%
7. Destination Development: Budget 2025–26 – Top 50 tourist destinations developed in challenge mode with performance-linked incentives.
8. Tribal & Inclusive Tourism: MUDRA loans (collateral-free) for homestays in tribal areas. Supports tribal livelihoods and regional development.
9. Medical & Spiritual Tourism: Push for Buddhist circuits, Ayush facilities, and medical tourism.

Conclusion

India’s tourism sector has immense untapped potential. With improved safety, infrastructure, service quality, digital branding and inclusive development, tourism can become a powerful engine of economic growth, job creation, cultural preservation, and social stability. If strategically developed, tourism can transform India into a leading global destination while strengthening national integration and frontier development.

FAQs

Q1. How much does tourism contribute to India’s GDP? 

Currently about 5–6%, projected to rise to 7.6% by 2034.

Q2. How many jobs does tourism generate? 

In FY 2023, it created around 7.6 crore jobs, absorbing large numbers of semi-skilled and informal workers.

Q3. What are India’s major sources of foreign tourists? 

USA, Bangladesh, UK, Australia, and Canada.

Q4. What are the main challenges facing Indian tourism? 

The “Three I’s”: Image (poor safety, poor sanitation), India (Service Ecosystem Problems), and inadequate Infrastructure.

Q5. What government measures are boosting tourism? 

Schemes like Swadesh Darshan, PRASHAD, UDAN, Incredible India 2.0, GST cuts, and development of top 50 destinations in challenge mode.