Context:

• The US decision to impose higher tariffs on Indian exports highlights India’s vulnerability to external trade shocks.
• Tourism emerges as a resilient alternative growth engine, offering employment, foreign exchange, and soft power advantages.

Tourism’s Economic Potential:

• Labour-intensive sector:
  • Generates jobs across transport, hospitality, handicrafts, wellness, food services, and entertainment.
  • Employs both skilled professionals (urban) and semi-skilled youth (rural).
• Current contribution:
  • Tourism contributes around 5% of India’s GDP (compared to the global average of 10%).
  • Countries like Spain and UAE, where tourism accounts for about 12% of GDP, illustrate the potential when the sector is treated as a national growth priority.
• Foreign exchange earnings:
  • In 2024, tourism generated $28 billion or Rs 2,45,000 crore in foreign exchange earnings for India.
  • This is only a fraction of the potential of $130-140 billion, which can be achieved if the sector reaches 10% of GDP.
• Outbound tourism challenge:
  • In 2024, over 28 million Indians travelled abroad, spending an estimated $28-31 billion.
  • Indian travellers are among the highest spenders globally, presenting both a challenge and an opportunity.
  • Unless India offers world-class domestic experiences, spending will flow outward.

Growth Projections:

• If India can raise tourism’s GDP contribution from 5 to 10% over the next decade, the results would be transformative.
• For example, it will lead to an additional $516 billion to the economy each year, 40 million new jobs, and foreign exchange earnings rising to $130-140 billion.

Addressing Capacity Constraints:

• Unlike goods exports, the tourism sector is shaped primarily by perception, infrastructure, and facilitation — all of which can be directly enhanced.
• India currently has about 1,80,000 branded hotel rooms and 1.5 million unbranded rooms.
• Industry estimates indicate that India needs to triple its capacity in both categories to meet demand, remain price-competitive, and position itself as a major global events and conventions host.

Strategic Pathways for Tourism Growth:

• Infrastructure and destination development:
  • The Union Budget 2025-26 announcement on developing 50 destinations in partnership with states is an important step.
  • A world-class destination in each state, blending infrastructure, sustainability, and brand, can shift India’s positioning from a “place to see” to a “place to experience.”
• Seamless travel and connectivity:
  • Simplifying e-visas, reducing immigration queues and delivering a seamless arrival experience.
  • With India’s airlines set to expand their fleet by 1,000 aircraft, improved connectivity can give a decisive boost to tourism.
• Digital and content-led promotion: Millions of creators already showcase India to the world; the task now is to amplify visibility of India’s culture and experiences through AI-enabled curation and partnerships with global platforms.
• Private investment: Expanding the tourism sector’s inclusion in the Harmonised Master List of Infrastructure can catalyse investments, including PPP projects like hotels, ropeways, wayside amenities, and convention centres.
• Domestic tourism as a movement:
  • Domestic tourism, accounting for 86% of sector revenues, fosters cultural exchange, economic redistribution, and national integration.
  • Making interstate travel more affordable and convenient will amplify these benefits.
  • The Dekho Apna Desh campaign can evolve into a national movement.

Tourism as a Green and Inclusive Growth Driver:

• High multiplier effect: Every rupee spent flows across multiple sectors (transport, crafts, food services and community enterprises).
• Sustainable development: When developed sustainably, tourism is also a green growth driver, creating livelihoods without large-scale environmental costs.
• New niches: Wellness tourism, spiritual journeys, medical value travel, cultural experiences.

Conclusion:

• Tourism can provide economic resilience against trade shocks.
• It creates jobs that cannot be offshored, generates untaxable domestic demand, and fosters national pride.
• With bold strategy, infrastructure push, and sustainable promotion, India can turn adversity (tariffs) into opportunity by making tourism a pillar of economic growth and soft power projection.