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India is a significant market for travel and tourism, offering a diverse range of niche tourism products, including cruises, adventure, medical, wellness, sports, MICE (Meetings, Incentives, Conferences, and Exhibitions), eco-tourism, film, rural, and religious tourism. The country is recognized as a destination for spiritual tourism, attracting both domestic and international tourists. In the Travel & Tourism Competitiveness Report 2019 by the World Economic Forum, India ranked 34th globally, with its tourism sector’s price competitiveness ranked 13th out of 140 countries. The report also highlighted India’s well-developed air transport infrastructure (ranked 33rd) and reasonable ground and port infrastructure (ranked 28th). Additionally, India scored highly on natural resources (ranked 14th) and cultural resources and business travel (ranked 8th).

Tourism in India not only showcases the nation’s rich and diverse history, culture, and traditions but also significantly contributes to the economy. The Ministry of Tourism of India plays a pivotal role in formulating national policies for tourism development and promotion. Focused efforts are being made to promote niche tourism products, such as rural, cruise, medical, and eco-tourism. The Ministry’s ‘Incredible India’ campaign has been instrumental in promoting tourism across the country. In the 2024 interim Budget, Finance Minister Ms. Nirmala Sitharaman allocated ₹2,449.62 crore (US$294.8 million) to the tourism sector, marking a 44.7% increase from the previous fiscal year.

Market Size of the Tourism Sector

According to the World Travel and Tourism Council (WTTC), India ranked 10th among 185 countries in terms of travel and tourism’s total contribution to GDP in 2019. The travel and tourism sector contributed US$199.6 billion to India’s economy in 2022 and is expected to grow at an annual rate of 7.1%. The WTTC’s Economic Impact 2023 report noted that India’s travel and tourism GDP contribution grew by 5.9%. In 2021, the sector’s contribution to GDP was US$178 billion, and this is expected to reach US$512 billion by 2028. By 2029, the industry is projected to generate around 53 million jobs. The direct contribution of the travel and tourism industry to India’s GDP is anticipated to grow at an annual rate of 7-9% between 2019 and 2030. The Indian airline travel market, estimated at ~US$20 billion, is expected to double in size by FY27, driven by improved airport infrastructure and increased passport access.

As per the Ministry of Tourism, Foreign Tourist Arrivals (FTAs) in December 2023 were 1,070,163, bringing the total FTAs for January-December 2023 to 9,236,108, compared to 6,437,467 during the same period in 2022. Additionally, 26.52% of foreign tourists visiting in 2023 were part of the Indian Diaspora. Foreign exchange earnings (FEE) during January-December 2023 amounted to US$28.1 billion, with an additional US$10.90 billion earned during the January-April 2024 period. Domestic visitor spending increased by 20.4% in 2022, while international visitor spending rose by 81.9%, though still 40.4% below 2019 levels. The cumulative Foreign Direct Investment (FDI) equity inflow into the Hotel and Tourism industry reached US$17.2 billion between April 2000 and March 2024, constituting 2.54% of total FDI inflows across sectors.

Tour Operators and Their Facilities

West Bengal alone is home to 2,045 travel agencies, offering a wide range of services: Travel Management: Tour operators provide comprehensive travel management services, including transportation ticketing, accommodations, and car rentals.

Consulting Services: These services involve advising on various destinations, tour packages, and cost optimization. Operators interact with customers to understand their requirements and preferences.

Hotel Reservations: Tour operators assist visitors in reserving hotels that meet their expectations, from luxury accommodations to budget-friendly options.

Car Rental Services: Agencies offer car rental services, allowing visitors to choose vehicles that suit their needs and travel to their desired destinations.

Itinerary Planning: Based on customer preferences, travel agents create detailed travel itineraries, considering factors like travel dates, budget, and special requests.

Destination Knowledge: Travel agents possess extensive knowledge of the destinations they recommend, including popular attractions, local regulations, weather conditions, and safety considerations.

Travel Insurance: Additional services such as travel insurance are provided to cover potential losses during travel.

Conclusion

The travel and tourism industry in India is vast and holds significant potential for further revenue growth through collaborative efforts by all stakeholders involved.