Indian Tourism Sector – A Valuable Vehicle for Fostering Growth

The Indian Tourism sector has emerged as one of the fastest growing economic sectors in the country over the past few decades and is a significant growth driver in terms of its contribution to employment generation, foreign exchange earnings and Gross Domestic Product (GDP). The sector has great potential considering the abundance of places of natural beauty spread across the country, supported by a rich culture and heritage and therefore is a valuable vehicle for fostering economic growth and prosperity.

The travel and tourism sector accounted for 9.3% of total employment opportunities generated in the country in 2016, which is expected to rise by a further 2% per annum by 2026, creating a total of around 46.42 million jobs by 2026. India’s Foreign Exchange Earnings from tourism increased 20.4% year-on-year during January-November 2017 to US$ 24.65 billion while the sector’s direct contribution to GDP is expected to grow around 8% per annum during 2016-26.

Already the top destination in the South Asian region, India is also projected to become one of the 10 fastest growing destinations for leisure-travel spending between 2016 and 2026, as per World Travel and Tourism Council research forecasts. Thus, prospects for the sector look bright and there is huge potential for the sector to grow further.

Recent Achievements

In recent times, India has taken great strides in improving its tourism sector which helped the country achieve an impressive rank of 40 in the World Economic Forum’s Travel & Tourism Competitiveness Index, a 12 places jump from 2015. With this, India featured in the list of most improved economies along with other countries such as Japan, Korea, Vietnam and Bhutan.

India’s Performance on the Travel & Tourism Competitiveness Index (TTCI)

Note: The TTCI Index comprises of four broad components – (i) Enabling Environment supported by the pillars of Business Environment, Safety & Security, Health & Hygiene, Human Resources & Labour Market and ICT readiness, (ii) T & T Policy and Enabling Conditions supported by the pillars of Prioritization of Travel & Tourism, International Openness, Price Competitiveness and Environmental Sustainability (iii) Infrastructure supported by the components of Air Transport Infrastructure, Ground & port infrastructure and Tourist Service Infrastructure & (iv) Natural & Cultural Resources supported by the pillars of Natural Resources and Cultural Resources & Business Travel
Source: The Travel & Tourism Competitiveness Report 2017

India achieved impressive ranks with respect to the parameters of cultural resources & business travel (9th), natural resources (24) and price competitiveness (10). It has also made significant progress with respect to Ground & port (29), air transport infra (32) and international openness (55 – up 14 places) which also contributed to the higher ranking.

However, improvements are required on several fronts including security and safety of tourists (114), health and hygiene (104), environmental sustainability (134) and tourist service infra (110).

With the inclusion of Non-Resident Indians (NRIs), along with Foreign Tourist Arrivals to determine International Tourist Arrivals (ITAs)[1], India achieved an impressive rank of 24 in 2016 as opposed to 41 in 2014 and 40 in 2015, in the latest and revised UNWTO Barometer. As of 2016, India accounts for 4.72% of ITAs in Asia and the Pacific and has occupied the 8th rank in terms of ITAs.

These improvements on various fronts is a reflection of an improved and expanding tourism sector.

Foreign Tourist Arrivals (FTAs)  

[1] So far only the figures of FTA were compiled in India

Indian FTAs are on the rise and registered an impressive growth rate during 2017.  In 2016, FTAs stood at 8.8 million and recorded a growth rate of 9.7% over the previous year.

Foreign Tourist Arrivals (FTAs) in India

Source: India Tourism Statistics at a Glance, 2017, Ministry of Tourism

The number of FTA’s in December 2017 was 1.76 million compared to FTAs of 1.02 million in December 2016 and registered a growth rate of 15.2% in December 2017 compared to 11.9% in the same month last year.

FTAs in 2017 stood at 10.17 million compared to 8.8 million in 2016 and the growth rate stood at 15.6% in 2017 as opposed to 9.7% in 2016.

Top Source Countries for FTAs

Bangladesh was the top country in 2016 accounting for more than 1.38 million FTAs, occupying 15.68 % share of the total. Other top source countries included the US, UK, Canada and Malaysia, among others.

% Share of Top 10 Countries for FTAs in India in 2016

Source: India Tourism Statistics at a Glance, 2017, Ministry of Tourism

Foreign Exchange Earnings (FEEs)

FEEs have been steadily growing for India on account of increasing FTAs every year.  With FTAs crossing the 10 million mark in 2017, the tourism sector got a major boost which pushed the country’s earnings to over USD 27 billion.

Foreign Exchange Earnings (2012-2017)

Source: India Tourism Statistics at a Glance, 2017, Ministry of Tourism

Domestic Tourist Visits

Domestic Tourist Visits went up from around 1,432 million in 2015 to around 1,614 million in 2016, registering a growth rate of 12.7%. Tamil Nadu was the top state in terms of domestic tourist visits followed by Uttar Pradesh, Andhra Pradesh, Madhya Pradesh and Karnataka.

Schemes and Policies to Promote Tourism

The Government has undertaken several schemes and initiatives over the years to boost Indian tourism.

The Swadesh Darshan Scheme was launched in January 2015 for integrated development of theme based tourist circuits in the country, under which thirteen thematic circuits including North-East India Circuit, tribal Circuit, Buddhist Circuit, rural Circuit etc. were identified. The scheme also aims to generate greater employment, develop world class infrastructure and foster community based development.

In 2015, the PRASAD Scheme (National Mission on Pilgrimage Rejuvenation and Spiritual Augmentation) was launched to develop and beautify pilgrimage destinations. Thirteen sites were identified under the scheme such as Amritsar, Mathura, Varanasi, Kedarnath and Kanchipuram, among others.

The Ministry of Tourism provides central financial assistance for various tourism projects under both these schemes to State Governments/Union Territory Administrations.

The National Heritage City Development and Augmentation Yojana (HRIDAY) was launched in January 2015 to preserve and revitalize the heritage cities. With a duration of 4 years (to be completed in Nov 2018) and a total outlay of INR 500 crores, the scheme is being implemented in 12 identified cities, namely, Ajmer, Amravati, Dwarka, Gaya, Warangal, etc.

For facilitating and easing the visa regime of the country and providing a hassle free travel experience for foreign tourists, the Government introduced the e-Tourist Visa scheme which enables the prospective visitor to apply for an Indian Visa from his/her home country online. During December 2017, a total of 2.41 lakh foreign tourists arrived on e-Tourist visa as compared to 1.62 lakh during December 2016, registering a growth of 48.3%.

To attract more foreign tourists to the country, the Ministry of Tourism launched the Incredible India 2.0 Campaign during 2017-18 to position India as a must experience destination for overseas travellers. The scheme would focus on specific promotional plans and product specific content creation rather than generic promotions to promote and market the sector in a big way.

The 2018-19 Union Budget also saw some major announcements to promote the sector. It was announced that the Government would develop ten prominent tourist sites into Iconic Tourism destinations by following a holistic approach involving infrastructure and skill development, development of technology, attracting private investment, branding and marketing. Further, it was announced that tourist amenities at 100 Adarsh monuments of the Archaeological Survey of India will be upgraded to enhance visitor experience.

The Budget also included measures to promote tourism and emergency medical care by encouraging investment in sea plane activities. In addition, the Government expanded the scope of harmonized list of infrastructure by including ropeways to promote tourism, and expanded the scope of railways infrastructure to include development of commercial land around railway stations.

All these measures along with other measures to promote infrastructure would provide a boost to the Indian travel and tourism sector and would make travelling to and within India an enriching and comfortable experience for international as well as domestic tourists.

 

 

 

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