A

BRIEF REPORT

ON

Development of TOURISM IN INDIA

August 2013

1. INDUSTRY OVERVIEW

1.1 Background

Tourism is driven by the natural urge of every human being for

new experiences, and the desire to be both educated and
entertained. The motivations for tourism also include religious
and business interests; the spread of education has fostered a
desire to know more about different parts of the globe. The
basic human thirst for new experience and knowledge has
become stronger, as communication barriers are getting
overcome by technological advances. Expenditure on tourism
induces a chain of transactions requiring supply of goods and
services from the related sectors. The consumption demand,
emanating from tourist expenditure also induces more
 employment and generates a multiplier effect on the
economy.

Tourism in India is broadly classified by its regions - North,

East, West, and South Indian tourism. Each part of India offers
identifiable differences from the rest of the nation. The
creation of niche tourism products like medical tourism,
wellness tourism, religious circuits, adventure tourism, cruise
tourism, and caravan tourism has served to widen the net of
this sector. Inbound tourism is booming and the country is
going all out to lure more travellers11 from around the world.
Contrary to perceptions across the world that tourism in India
is still confined to traditions, the country is opening up with
trendy tour packages and affordable air travel deals to woo
inbound visitors from every segment.

1.2 Present Scenario of Tourism in India

The Indian Tourism sector is one of the largest service industries in the
country in terms of its contribution to the Gross Domestic Product (GDP)
and Foreign Exchange Earnings, as well as for providing employment to
millions. In 2020, the travel & tourism industry’s contribution to the GDP
was US$ 121.9 billion; this is expected to reach US$ 512 billion by 2028. In
India, the industry’s direct contribution to the GDP is expected to record an
annual growth rate of 10.35% between 2019 and 2028.
By 2028, Indian tourism and hospitality is expected to earn US$ 50.9 billion
as visitor exports compared with US$ 28.9 billion in 2018. International
tourist arrivals are expected to reach 30.5 million by 2028.
The travel market in India is projected to reach US$ 125 billion by FY27
from an estimated US$ 75 billion in FY20.

Tourism in India is witnessing widespread growth on the back

of increasing inbound tourism by the burgeoning Indian
middle class, rising inflow of foreign tourists and successful
government campaigns for promoting ‘Incredible India’.
Infrastructure development holds the key to India’s sustained
growth in the Tourism sector. Further the government has
also allowed 100 per cent foreign investment under the
automatic route in the Hotel and Tourism related industry.
Significantly, the country has the potential to

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become a major global tourist destination, with the Tourism

sector expected to contribute around US$ 512 billion by 2028
in the GPD and earning is expected to cross US$50 billiom .
India is currently ranked 7th in the Asia Pacific region and
34th overall in the list of the world's attractive destinations.

Foreign tourist arrivals in the country have increased

substantially during the past decade, it was 5.8 million in 2009
 and touched a whooping 13,9 million in 2019. motivated by
both, business and leisure needs and are further expected to
grow at a compound annual growth rate (CAGR) of around 11
per cent during 2019-2028. Visitor exports are a key
component of the direct contribution of the sector. The
country has received over 10 lakh tourists until now in 2022

Drivers behind increase in Tourist Traffic

The main driver for increase in tourist traffic to India
has been the following factors:
Domestic Tourist Traffic

⮚ Rapidly increasing purchasing power of the middle class

⮚ Better road connectivity
⮚ Evolving lifestyle

International Tourist Traffic

⮚ Value for money/economical holiday destination

⮚ Business cum pleasure destination
⮚ Development of Kerala and Rajasthan as the most popular tourist
destinations in India with their distinctive brand image
⮚ Opening of the sectors of the economy to private sector/foreign
investment ⮚ Reform in the aviation sector such as Open Skies
Policy has led to better connectivity with many countries with
India
⮚ Success of “Incredible India” campaign and other tourism
promotion measures

1.3 Forms of Tourism in India

India offers various tourism options due to its vastness and diversity, attracting
tourists from all over the world. The country boasts of natural
treasures like mountains, ocean, seas, deserts, rainforests, valleys etc.
on one hand, while world-class healthcare infrastructure on the other,
which provides varied kinds of tourism options such as adventure and
rural tourism, sustainable tourism/eco-tourism, cruise tourism, golf
tourism and medical tourism to the travelers.

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1.3.1 Rural Tourism

The Ministry of Tourism started the scheme of rural tourism in 2002-03 with the
aim to showcase art, rural life, and culture and heritage to the tourists at
various rural locations and villages. The Ministry intends to help the local
community economically and socially, together with facilitating interaction
between the local population and tourists, through this scheme. Around 120
crores sanctioned by Tourism Ministry under the Rural Circuit theme of
Swadesh Darshan Scheme in the country during 2017-19.
This segment has also been winning accolades in the
international circuits as well. For instance, the Rural Tourism
Project at Hodka village in Kutch District of Gujarat won the
Pacific Asia Travel Association (PATA) award for the year
2010 under the Heritage category.

1.3.2 Cruise Tourism

Cruise tourism is emerging as one of the most dynamic
segments of the leisure industry globally. India with its vast
and beautiful coastline, forests and undisturbed idyllic
islands, rich historical and cultural heritage, can be a
fabulous tourist destination for cruise tourists. The Cruise
Shipping Policy of the Ministry of Shipping was approved by
the Government of India on June 28, 2008. The objectives of
the policy are to make India an attractive cruise tourism
destination with the state-of-the-art infrastructural and other
facilities at various parts in the country; to attract the right
segment of the foreign tourists to cruise shipping in India; to
popularize cruise shipping with Indian tourists.

1.3.3 Adventure Tourism

Adventure travel involves exploration or travel to remote,
exotic areas. Adventure tourism is rapidly growing in
popularity as a tourist seeks different kinds of vacations . It is
estimated that on average, 20 lakh people participate in
adventure tourism in India. However, the percentage of people
from outside the country is around 10% and this represents a
decline considering that around 2000, 60% of adventure tourists
in India were from outside the country.

1.3.4 Sustainable Tourism/Eco Tourism

Sustainable Tourism growth is in the process of evolving the
Sustainable Tourism Criteria for India. In recent years
tourism industry in India has registered a considerable
growth. A Steering Committee with representatives from all
the sectors of the tourism and hospitality industry of India has
been constituted to develop draft Sustainable Tourism Criteria
which would eventually be adopted by the different sectors of
the industry.

1.3.5 Wellness Tourism

Wellness tourism is about travelling for the primary purpose of
achieving, promoting, or maintaining maximum health and a
sense of well-being. Health Tourism holds immense potential
for India. The Indian systems of medicine that is Ayurveda,
 Yoga, Panchakarma, Rejuvenation Therapy etc. are among the
most ancient systems of medical treatment of the world.

1.3.6 Medical Tourism

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India is one of the most lucrative medical tourism markets in the

world. The sector is witnessing remarkable growth on the back
of Government support through policies and initiatives, low cost,
less waiting time and healthcare infrastructure. In mid–2020,
India's medical tourism sector was estimated to be worth US$ 5–
6 billion. In 2017, 495,056 patients visited India to seek medical
care.The growth in India’s medical tourism market will be a boon
for several associated industries, including hospital industry,
medical equipments industry and pharmaceutical industry.

1.3.7 Religious Tourism

This segment of tourism has been growing in popularity.
Bihar, for instance, holds a very important position in such a
touristic destination as it has association of five religious
circuits of country. The Buddhist Circuit, a pilgrimage route
including sites of significance related to the life of the
Buddha, is sacred to 500 million Buddhists and also attracts
non-Buddhist tourists interested in historical heritage sites.
The four main sites are Bodhgaya in Bihar, Sarnath and
Kushinagar in Uttar Pradesh. The Shirdi-Shanishignapur
circuit in Maharashtra clocked over 13 million tourists
between 2018-2019. Apart from Shirdi, the most favoured
destination, and Siddhivinayak temples, other places that drew
the crowds were Trymbakeshwar in Nashik and Tuljadevi in
Osmanabad.

1.4 Sub-segments of tourism industry

The tourism industry in India can be categorized under
three major sub segments as depicted below:

Hotels and
Restaurants
1.4.1 Hotels and Restaurants

Tourism
Industry

Tour Operators

Travel Industry

The Hotel & Restaurants Industry has contributed between

1.2% and 1.5% of the GDP over the last seven to eight years.
The Ministry of Tourism estimates that there are more than
8,700 hotels at 64 key locations across the country with a total
room supply of about 274,000 including hotels in the
classified, approved but not classified, and licensed by the
state governments but not approved categories.

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Major Players
 In the large/luxury hotels segment there are about 11 long-
standing players such as ITC Hotels, Asian Hotels, The
Oberoi Group of Hotels, Hotel Leela Ventures, ITDC, Indian
Hotels, The Park Hotels and international players like Hilton
Hotels, Marriott International, Le Meridien Hotels & Resorts,
and Radisson Hotels & Resorts. There are about 16 listed
hotel groups in the mid-segment including Bharat Hotels,
Oriental Hotels, Nehru Place Hotels, Jaypee Hotels, Piem
Hotels, and Taj GVK Hotels.

Tour Operators
The tour operators, tourist operators and adventure tour
operators in the country follow strict guidelines. As per the
estimate of Ministry of Tourism, there are nearly 6,000 travel
trade companies and firms comprising of tour operators, travel
agents, and tourist transporters

Major Players
⮚ Thomas Cook India Pvt Ltd
⮚ Cox & King India Pvt Ltd
⮚ Kuoni India Ltd

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2. GOVERNMENT POLICY

2.1 Government Initiatives

Government of India, the government has allowed 100 per

cent foreign investment under the automatic route in the
Hotel and Tourism related industry. The terms hotel includes
 restaurants, beach resorts and other tourism complexes
providing accommodation and /or catering and food facilities
to tourists. The term tourism related industry includes:
⮚ Travel agencies, tour operating agencies and tourist
transport operating agencies. ⮚ Units providing facilities
for cultural, adventure and wildlife experience to
tourists ⮚ Surface, air and water transport facilities for
tourists
⮚ Convention/seminar units and organizations

As a facilitative measure to make Tourism sector in India

more attractive the following initiatives are taken by
Government:

⮚ The Government has launched a Scheme of ‘Visa on Arrival’

(VoA) from January 2010 for citizens of five countries, viz.
Finland, Japan, Luxembourg, New Zealand and Singapore,
visiting India for tourism purposes. The Government has now
extended this Scheme for the citizens of six more countries,
namely Cambodia, Indonesia, Vietnam, Philippines, Laos and
Myanmar in January 2011. During the period January-June
2011, a cumulative figure of 5774 VoAs were issued, with a
total of 865 & 770 VoAs issued in the months of May & June
respectively.
⮚ To overcome the bottlenecks of multiple inter – state road
transport barriers, Ministry of Tourism has been advocating
implementation of seamless travel for commercial tourist
vehicles. This would facilitate smooth movement of tourist
traffic and avoid delays and inconvenience to tourists.

Some Mega Destinations/Circuits Identifies in different States as on

2015
S. States Name of the Mega Projects
No

1 Andhra Charminar area of Hyderabad, Tirupati Heritage Circuit,

Pradesh Kadapa Heritage Tourist Circuit

2 Assam National Park Mega circuit covering Manas, Orang,

Nameri, Kaziranga, Jorhat, Sibsagar and Majouli

3 Bihar Bodhgaya-Rajgir-Nalanda Circuit

4 Chhattisgar Jagdalpur-Tirathgarh-Chitrakoot-Barsur Dantewada

h Tirathgarh Circuit

5 Delhi Illumination of Monuments Circuit

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6 Goa Churches of Goa

7 Gujarat Dwarka-Nageshwar-Bet Dwarka Circuit
Shuklatirth-Kabirvad Mangleshwar Angareshwar

8 Haryana Panipat-Kurukshetra-Pinjore

9 Himachal Eco and Adventure Circuit (Kullu-Katrain-Manali)

Pradesh

1 Haryana & Panchkula-Yamunanagar (Haryana)-Paonta Sahib

0 Himachal (Himachal Pradesh) Circuit
Pradesh

1 Jammu & Mubarak Mandi Heritage Complex

1 Kashmir Naagar Nagar Circuit (Watlab via Hazratbal,
Tulmullah, Mansbal and Wullar Lake), Srinagar
Spiritual and Wellness Destination Leh – Ladakh

1 Karnataka Hampi
2

1 Kerala Muziris Heritage Circuit connecting historically and

3 archaeologically important places of Kodungalloor

1 Madhya Spiritual and Wellness Destination of Chitrakoot

4 Pradesh

1 Maharashtra Vidarbha Heritage Circuit

5 Aurangabad

1 Manipur INA Memorial

6

1 Orissa Bhubaneswar- Puri-Chilka

7

1 Punjab Amritsar
8

1 Rajasthan Ajmer- Pushkar, Jodhpur- Bikaner-Jaisalmer

9

2 Sikkim Gangtok
0

2 Tamilnadu Mahabalipuram, Pilgrimage Heritage, Madurai

1 Rameshwaram-Kanyakumari), Thanjavaur

2 Uttarakhand Haridwar-Rishikesh-Muni-Ki-Reti Circuit

2

2 Uttar Pradesh Agra Circuit, Varanasi-Sarnath-Ramnagar

3

2 West Bengal Ganga Heritage River Cruise Circuit

4
 2 Tripura Mega Lake Circuit including Mata Bari
5

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% STEPS TAKEN TO PROMOTE THE TOURISM SECTOR OF INDIA

1) Creation of world class tourism related infrastructure: Swadesh

Darshan scheme was launched by the Ministry of Tourism for the
development of theme based tourist circuits to cater to both mass and
niche tourism. Under this scheme that aims to develop world class
infrastructure to promote cultural and heritage value of the country and
enhance the tourist attractiveness, 27 projects for Rs. 2261.50 crore have
been sanctioned for 21 States and Union Territories since its launch in
January 2015.

 The National Mission for Pilgrimage Rejuvenation and

Spiritual Augmentation Drive (PRASAD) scheme, was also
launched by the Ministry for the development and
beautification of pilgrimage sites to tap the growth of
domestic tourists driven by spiritual/religious sentiments.
The scheme seeks to augment tourism infrastructure at
places of pilgrimage to provide better facilities to
pilgrims/tourists and enhance their experience.

2) Growth in tourist footfalls: Foreign Tourist Arrivals (FTAs) during the

period January- July, 2016 were 49.22 lakh with a growth of 10.0% over
the same period in 2015. In January-July 2015, FTAs of 44.73 lakh were
registered with a growth of 4.6% over the same period in January- July,
2014. Foreign tourist visits (FTVs) to the States/UTs was 23.3 million in
2015, as compared to 22.3 million in 2014, registering a growth of 4.4%
over 2014.
Source: Ministry of Tourism

3) Ease of doing business: Ministry of Tourism has set up a Web-based

Public Delivery System for recognition of Travel Trade Service Providers
and for classification of hotels in order to ease the process of filing
applications by Travel Trade Service Providers seeking recognition from
the Ministry. This is also to bring in transparency in granting the
approvals. This online process has also been integrated with payment
gateway with effect from January 2016.

• Introduction of a Mobile App: The Ministry of Tourism launched a

mobile application called Swachh Paryatan on February 22, 2016, which
will let citizens report any hygiene issues at various tourist destinations
across the country.

 Multilingual Tourist Helpline: The Ministry of Tourism

launched the 24×7 Toll Free MultiLingual Tourist Helpline in
12 languages on February 8, 2016. It can be accessed on
Toll Free Number 1800-11-1363 or short code 1363. The
languages handled by the Tourist Helpline include ten
international languages besides English and Hindi, namely,
Arabic, French, German, Italian, Japanese, Korean, Chinese,
Portuguese, Russian and Spanish.

4) Other initiatives: Promoting the North-Eastern Region: The

International Tourism Mart is organized every year in North-Eastern States
with the objective to highlight the tourism potential in the region. The 4th
International Tourism Mart was organized from 14-16 October, 2015 at
Gangtok in Sikkim.

 Adarsh Smarak: ASI has identified 100 monuments to be

developed as Model Monuments. These monuments would
be provided necessary tourist facilities including Wi-Fi,
security, signage, encroachment free area, interpretation
centres showing short films about the importance of
monuments and signboards of Swachh Bharat Abhiyan.
Some of the monuments included in Adarsh Smarak scheme
are Leh Palace (Leh), Humayun’s Tomb(New Delhi), Red
Fort,(Delhi), Shore Temple (Mahabalipuram), Elephanta
Caves (Mumbai), Taj Mahal (Agra), Rani-ki-Vav (Gujarat)
among others.

5 Incredible India (styled as Incredıble!ndıa) is the name of an international

tourism campaign maintained by the Government of India since 2002, to
promote tourism in India. The "Incredible India" title was officially branded and
promoted since 2002. The phrase "Incredible India" was adopted as a slogan by
the ministry. Before 2002, the Indian government had regularly formulated
policies and prepared pamphlets and brochures for the promotion of tourism,
however, it had not supported tourism in a concerted fashion. In 2002, the
tourism ministry made a conscious effort to bring in more professionalism in its
attempts to promote tourism. It formulated an integrated communication
strategy with the aim of promoting India as a destination of choice for the
discerning traveller.

DEVELOPMENT OF TOURISM ARES WISE IN INDIA:_

1) NORTH INDIA