Despite India’s strong tourism fundamentals, a NITI Aayog report revealed that the country’s tourism outcomes are falling short of their full potential. The report emphasized the necessity of enhancing the ease of doing business to attract investments and stressed the significance of visa facilitation in translating tourism interest into actual visits.
India’s tourism industry plays a crucial role in the economy, contributing Rs 15.73 lakh crore ($170 billion) to the GDP in FY 2023–24, representing 5.22% of the total economy. The sector also supported around 84.6 million jobs, marking a 20% increase over five years.
The report titled ‘Unlocking Growth in Tourism and Hospitality Sector’ highlighted that domestic tourism has been a major growth driver, surpassing pre-pandemic levels with 2.9 billion domestic tourist visits in 2024, exceeding the 2019 peak of 2.3 billion visits.
India boasts globally recognized tourism assets, including 44 UNESCO World Heritage Sites, 106 national parks, 18 biosphere reserves, and well-established pilgrimage and wellness tourism segments. The country also witnessed a recovery in international tourism, with around 20.6 million total international tourist arrivals in 2024, generating approximately $35 billion in international tourism receipts, a 9% increase from the previous year.
Despite these achievements, India’s share of global international tourist arrivals remains below 1.5%, significantly lower than leading economies. The report highlighted that while total international arrivals seem strong, the number of foreign tourist arrivals in 2024 was 9.95 million, indicating a demand that is still below pre-pandemic levels and trailing behind peer destinations like Thailand, Malaysia, and Vietnam.
The report also pointed out that tourism-related foreign exchange earnings in India are relatively modest compared to the country’s size and diversity. Outbound tourism from India has seen rapid growth, indicating a diversion of domestic demand. The report emphasized the need to address structural constraints hindering India’s ability to fully leverage its tourism assets and meet demand within the domestic tourism ecosystem.
Rajiv Gauba, a Member of NITI Aayog, highlighted that India’s tourism sector has the potential to drive economic growth, employment, and regional development. The report identified regulatory complexity, fragmented institutional processes, and procedural inefficiencies as key factors limiting India’s tourism sector from reaching its full potential.
To address these challenges, the report recommended streamlining regulatory requirements, eliminating redundancies, adopting risk-based compliance, and enhancing coordination among government levels. Key measures include simplifying approval processes for tourism businesses, reducing licensing burdens, enhancing permit regimes for tourist transport, and moving towards a more facilitative visa framework, such as Visa-on-Arrival for specific segments.
