India's Travel Industry to Reach $23.72 bn This Year

The India Brand Equity Foundation (IBEF) has projected that the travel and tourism industry in India is expected to generate a revenue of $23.72 billion this year. IEBF has projected an annual growth rate of 9.62 per cent till 2028, as airlines in India ramp up capaciry and new hotels are dotting the landscape in anticipation of a higher tourist inflow. This growth in the tourism industry is expected to propel the market volume to $34.25 bn by 2028. The government has allowed 100 per cent Foreign Direct Investment (FDI) in tourism industries, including hotels, resorts, and recreational facilities.

Prime Minister Narendra Modi has been leading the country's efforts in tourism, focussing on preserving its rich heritage and creating world-class infrastructure for tourism. The total FDI inflows in India for the financial year 2023-2024 was close to $18 billion, of which arounf $11.54 billion came via the FDI route. The  announcement of relaxation in FDI limits  is expected to propel the tourism industry to record levels leading to new job opportunities and economic growth.

The largest segment of growth in tourism is the package holidays market which is expected to reach a market volume of $10.48 billion this year. In another four years, the number of users in the package holidays market is expected to touch 64.74 million, with penetration increasing from 7.8 per cent this year to 10 per cent in 2028. Besides, the average revenue per user (ARPU) in this segment is forecasted to be $209.70 by 2028, with online sales expected to contribute 60 per cent of the total revenue in the travel and tourism market in India.

In line with global trends, the tourism industry is undergoing a transformation, promoting sustainable and eco-friendly travel options to attract tourists. Tourism is expected to make a significant contribution to the India's GDP, expected to touch $250 billion by 2030, generating employment to 137 million people. Last month, Prime Minister Narendra Modi launched 52 tourism projects worth more than Rs 1400 crores under the Swadesh Darshan and PRASHAD Scheme.

These projects include all areas of tourism infrastructure development, including pilgrimage sites, heritage destinations, and recreational facilities. The focus is to enhance visitor experiences and promote the participation of local communities in tourism. The Prime Minister Modi also unveiled visionary campaigns and schemes aimed at fostering growth in the tourism industry, including the 'Dekho Apna Desh People's Choice 2024' and 'Chalo India Global Diaspora Campaign.' These new initiatives have been designed to engage citizens and the Indian diaspora in promoting tourism and showcasing India's rich cultural heritage and diversity.