In the past few years, the Indian tourism and hospitality sector has emerged as a key economic growth driver in the country. The industry is a large employment generator and a crucial source of foreign exchange for the nation. Not only is the country ranked the second largest tourist destination in Asia but also among the twenty growing markets globally. Additionally, the direct contribution of this industry to India’s GDP is expected to grow at an annual growth rate of 6.4 percent in 2017 and beyond.

Market Size

One of the main factors that have continued to support growth of both domestic and outbound India tourism industry over the years is the country’s rising middle class. In 2015, the total outbound trips grew by 8.7% while inbound tourist volume increased by 6.8% between 2010 and 2015. Tourist arrivals via e-Tourist Visa also grew by a whopping 196.6% annually to 66,097 tourists in 2016, owing to the introduction of the e-Visa for 150 countries against the initial coverage of 113 countries. Online hotel bookings are also expected to grow in the coming years due to the increasing penetration of internet in the country.

Increased Foreign Direct investment (FDI)

The tourism industry in India is among the top sectors that have attracted the highest FDI. Between 2000 and 2016, the industry attracted a total of US$ 9.23 billion based on the report released by the country’s department of Industrial Policy and Promotion.

Government Initiatives

The Indian government has recently recognized the potential of the country’s tourism sector and has come up with numerous initiatives, all aimed at making Indian a top tourism hub. For instance, the country’s Ministry of Tourism plans to meet the growing demand of skilled and trained manpower in the industry by providing quality hospitality training to students and upgrading the skills of the current tourism service providers. The ministry also plans to exempt home stays from commercial and service taxes, which will encourage more investment in home stays. The Union Cabinet has also signed a number of Memorandums of understanding with other countries’ tourism sectors to boost corporation in tourism related fields.


By and large, India’s tourism industry has an immense growth potential given its rich cultural heritage, beautiful terrains and destinations spread across the country as well as variety in ecology among other factors. The expansion of e-visa scheme and continued government support is expected to double the inflow of tourists to India in the coming years. What’s more, the country is projected to be the fastest growing state in the wellness tourism sector in the coming years, clocking over 20% annual gain through 2017 and beyond. If you would like to learn more, visit Tour East Holidays and check out their online resources.

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