Salwa Judum and Supreme Court’s Intervention

Why in the News?

1. The United States has recently raised tariffs on some Indian exports such as steel pipes and chemicals, underlining the risks of over-dependence on merchandise trade.
2. This development has renewed the debate on diversifying India’s growth drivers beyond tariff-sensitive sectors.
3. In this context, tourism emerges as a “tariff-proof” sector. It is not affected by border duties, generates large-scale employment, earns valuable foreign exchange, and strengthens India’s soft power.
4. Scaling up tourism can provide India with a stable, resilient, and inclusive engine of growth at a time when external trade is becoming increasingly uncertain.

Key Highlights

1. Tourism as a Tariff-Free Growth Sector
   1. Unlike goods exports, tourism cannot be taxed at foreign borders.
   2. It provides jobs across hotels, transport, handicrafts, wellness, and entertainment.
   3. Both skilled workers in cities and semi-skilled youth in villages benefit.
2. India’s Current Position vs the World
   1. Tourism contributes only 5% of India’s GDP, much lower than the global average of 10%.
   2. Countries like Spain and UAE earn ~12% of GDP from tourism, showing India’s untapped potential.
   3. In 2024, India earned $28 billion (₹2.45 lakh crore) in foreign exchange through tourism.
3. Outbound vs. Inbound Tourism
   1. In 2024, over 28 million Indians travelled abroad and spent $28–31 billion.
   2. Indians are among the world’s highest spenders on luxury and leisure travel.
   3. Unless India creates world-class experiences at home, this spending will continue to go overseas.
4. Huge Growth Potential
   1. If India raises tourism’s GDP share from 5% to 10% in the next decade, it could mean:
      1. $516 billion extra contribution to the economy every year.
      2. 40 million new jobs across different sectors.

• Foreign exchange earnings rising to $130–140 billion.

1. But this needs massive capacity expansion. India must triple hotel rooms (both branded and unbranded) to meet demand.

5. Government’s Strategy and Roadmap
   1. Develop 50 world-class destinations in partnership with states, with focus on infrastructure and branding.
   2. Make travel easier by simplifying e-visas, reducing immigration queues, and improving airport experience.
   3. Expand air connectivity with India’s airlines adding 1,000 new aircraft in coming years.
   4. Use digital campaigns, influencers, and AI-driven promotion to showcase India globally.
   5. Boost private investment by giving tourism infrastructure status; encourage PPPs in hotels, ropeways, and convention centres.
   6. Strengthen domestic tourism through the Dekho Apna Desh campaign, which already makes up 86% of revenues.

Implications

1. Macroeconomic resilience and external stability
   1. A larger tourism sector reduces dependence on tariff-sensitive goods exports and strengthens foreign exchange inflows.
   2. More diversified services receipts make the current account less vulnerable to single-market shocks.
2. Large-scale employment and inclusive growth
   1. Tourism creates jobs across skill levels: hospitality professionals, drivers, artisans, guides, and gig workers.
   2. Community-based tourism and MSME linkages can raise rural incomes and expand women’s participation.
3. Regional development and urban-rural linkages
   1. Destination development spreads economic activity to Tier-2/3 towns, heritage sites, and rural circuits.
   2. Improved connectivity and public amenities boost local value chains beyond tourism (construction, retail, logistics).
4. Revenue retention and reduced outbound leakage
   1. Better domestic products and luxury offerings can keep part of the $28–31 billion Indians currently spending abroad within India.
   2. Increased domestic and inbound spend raises tax revenues and local multiplier effects.
5. Soft power and sustainability gains
   1. Wellness, cultural, spiritual and medical tourism reinforce India’s global image and attract high-value visitors.
   2. When managed well, tourism supports conservation, green jobs and low-carbon livelihoods.

Challenges and Way Forward

Conclusion

Tourism can be a powerful, tariff-insulated pillar for India’s growth if policy, investment, and operations are aligned. The immediate priorities are expanding and upgrading capacity, simplifying visas and arrivals, improving last-mile connectivity, professionalising services, and financing projects through a mix of public and private instruments. Measured execution, backed by strong coordination between the Centre, states, and industry, can convert outbound spending into domestic value, create millions of jobs, and strengthen economic resilience.