The inbound tourism industry in India has been experiencing significant growth in recent years, with the country emerging as a popular destination for international travellers, a report stated.
Despite the challenges posed by the Covid-19 pandemic, India received 6.2 million foreign tourist arrivals in 2022, with a growth rate of 307.9 percent as compared to 1.52 million in 2021. Inbound tourism to India is expected to grow at a CAGR (Compound Annual Growth Rate) of 12 percent from 2022 to 2027.
According to the latest Nangia Andersen Knowledge report “Inbound Tourism in India – Unlocking the Potential,” released in association with FICCI, this growth will be driven by rising disposable incomes, the growth of the middle class, and increasing awareness of India as a tourist destination.
It also pointed out that the industry is expected to recover in the post-pandemic period with increased investment in infrastructure, marketing, and promotional activities. However, the report also identifies certain challenges such as high taxes and fees, inadequate infrastructure, and lack of skilled manpower that need to be addressed via collaborative efforts between the government and the private sector.
Other key findings in the report showed that the Covid-19 pandemic has severely impacted inbound tourism to India, with the number of foreign tourist arrivals (FTAs) declining by over 80 percent in 2020 compared to the previous year. However, the industry is expected to recover gradually as international travel restrictions ease and vaccination rates increase.
India’s top source markets for inbound tourism are the United States, the United Kingdom, Bangladesh, Canada, and Sri Lanka. However, the report suggests that there is significant potential for growth in emerging markets such as China, Russia, and the Gulf Cooperation Council (GCC) countries.
On the other hand, the most popular destinations for international tourists in India are the Golden Triangle (Delhi, Agra, and Jaipur), Goa, Kerala, Rajasthan, and the Himalayas. There is also an increasing interest in offbeat destinations such as Ladakh, Andaman and Nicobar Islands, and the North-Eastern states.
Challenges and opportunities:
The report further identifies several challenges facing the inbound tourism industry in India, including infrastructure deficiencies, safety and security concerns, bureaucratic hurdles, and lack of trained manpower. According to the knowledge report, the government needs to take proactive measures such as increasing investment in infrastructure, simplifying visa processes and enhancing safety and security measures for tourists.
It also highlighted the significant economic benefits of inbound tourism to India, including job creation, foreign exchange earnings, and growth opportunities for small and medium-sized enterprises (SMEs).
The Indian government is also actively promoting inbound tourism as a means of economic growth and job creation. The Ministry of Tourism has implemented various initiatives, including the Swadesh Darshan Scheme 2.0, the PRASHAD Scheme for pilgrimage destinations, a 24×7 Multi-Lingual Tourist Helpline, and e-Visa facilities for nationals of 165 countries. The ministry is also promoting niche tourism products, training service providers, opening new mountain peaks for adventure tourism, reducing GST on hotel rooms, and awarding tourism routes to airlines under the RCS UDAN Scheme.
The report also identifies digital technologies as a key enabler of growth within the inbound tourism industry in India, including the use of mobile applications, artificial intelligence, and big data analytics. There is also significant potential for growth in niche segments such as heritage tourism, wellness tourism and MICE.
The knowledge report also noted India’s G-20 Presidency and the Ministry of Tourism‘s declaration of 2023 as Visit India Year as great opportunities for inbound tourism. India’s G20 priorities center around sustainable growth, digital infrastructure, women’s empowerment, and more. The G20 Tourism Working Group has identified five priority areas, and the government is considering establishing an advisory board to promote India as a major tourism destination.
The Nation’s vision 2047 for tourism is a USD one trillion industry and to achieve this goal, India has formulated a draft national tourism policy and is diversifying tourism offerings, the report mentioned. Improving connectivity, enhancing tourism infrastructure, branding and promotion, and showcasing culture and heritage are part of the four-pronged development strategy.
The report also noted that there is significant potential for adventure tourism in India, including activities such as trekking, mountaineering, white water rafting, and wildlife safaris.Besides, the importance of sustainable tourism practices was also emphasised on as responsible tourism can help to preserve India’s rich cultural and natural heritage while also contributing to the development of local communities.
The report concludes by emphasising the need for collaboration between the public and private sectors to create a more enabling environment for the growth of the inbound tourism industry in India.
According to Suraj Nangia, Managing Partner and Head of Government and Public Sector Advisory at Nangia Andersen LLP, the objective of the report is to offer valuable insights into the present state of inbound tourism in India. These insights can be utilised to develop policies and initiatives aimed at enhancing India’s appeal to visitors and improving their overall experience during their stay.
Additionally, the report is expected to aid investors and developers in identifying opportunities for growth and investment in the tourism industry, he affirmed.
Poonam Kaura, Partner in Government & Public Sector Advisory at Nangia Andersen LLP, said that the report provides a thorough analysis of the tourism industry, covering five crucial aspects – Green Tourism, Digitisation, Skill Development, Nurturing Tourism MSMEs, and Destination Management. “It also looks ahead to India’s strategic vision for tourism up to 2047, highlighting the role of technology and digital advancements in its growth and development.”