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Will The Indian Tourism Industry Boost The Indian Economy In 2022

June 9, 2022

In the last few years, the Indian government has taken many initiatives to offer enough for the tourism sector by launching a cleanliness drive, providing better air connectivity to several places, improving digital connectivity, bringing the latest technology around tourist places, and building infrastructure and improving the overall tourism industry.

Two years back COVID-19 lockdowns hit the travel and tourism (T&T) sector very hard. In 2020, it faced losses of $4.5 trillion and 62 million jobs, which got impacted the living standards and well-being of communities across the world.

While COVID-19 vaccines were made available and things got normalised & easing of restrictions means a recovery was started, by 2021 it’s proving gradual but the people around the countries are not only being more cautious when it comes to health but also around the impact of travel on the environment and local communities as well.

In January 2022 International tourist arrivals rose by 18 million compared with 2021. This equals the expansion for the whole of 2021 from 2020, but January’s numbers were still 67% below the same month in 2019, according to the United Nations World Tourism Organization (UNWTO).

Now let's see how the Indian tourism Industry will impact the growth of the Indian economy.

The country’s travel industry was worth about US$75 billion in FY 2019-20, In fact, India’s international tourist arrivals are expected to reach 30.5 million by 2028. India’s tourism market is a significant economic multiplier due to its sector linkage to multiple service industries and the spillover of increased retail consumption.

India is the eighth-largest country in terms of contribution to travel and tourism GDP, and tourism is an important source of foreign exchange in India's economy like many other countries. It is expected to be among the top fastest-growing destinations for leisure-travel spending during the period 2019-2026.

The travel agency business in the country is dominated by micro, small, and medium enterprises (MSMEs), with around 300,000 travel agent businesses catering to holidaymakers, showcasing the largest volumes of business in bookings at about 55% of the travel market.

The Indian airline travel market was expected to be worth US$20 billion in 2019 and is projected to double in size by FY2027 due to improving airport infrastructure and growing access to passports.

India’s overall passenger traffic (both domestic and international) at airports reached 92% of pre-COVID levels in May 2022. International passenger traffic reached 63 % and 72 % of pre-COVID levels in April and May 2022 respectively. Recovery of domestic travel reached 98% of pre-COVID levels in May 2022.

Now if you have look at current matters across the countries are easily get visas in India now after Ukraine's Russian war crisis. The Russian government issued a travel advisory for its citizens to travel to India India, Sri Lanka, Turkey, Israel, the United Arab Emirates, etc. And not to travel to "dangerous" European countries.

Natalia Kostenko, the Deputy Chairman of the State Duma Committee on Tourism and Tourism Infrastructure Development, said that travelling to European countries would not be safe for Russians because of the massive number of Ukrainians residing abroad. She suggested some destinations that should be safe for Russian tourists such as India, Sri Lanka, Turkey, Israel, the United Arab Emirates, etc.

Even Russia's President Vladimir Putin also signed a decree suspending visa facilitation agreements with "unfriendly" European Union (EU) countries. The country's simplified visa process has been suspended in some EU countries as well as Norway, Switzerland, Denmark, Liechtenstein and Iceland etc. 

If Russian tourist comes to India it will help India to beat inflation as well Access to India’s tourism market is great liberalized. Rising income and growing middle class: A gradual rise in the number of dual-income families is leading to higher income which will support increased household spending for leisure and recreational purposes. The rising middle class has also seen support for the growth of domestic and outbound tourism.

The country has a diverse portfolio of niche tourism products, including the development and operation of cruises, adventure tourism, medical and wellness, eco-tourism and sustainable tourism, and religious tourism.

There are opportunities across various sub-segments, such as timeshare resorts, convention centres, motels, hotels, serviced residences, and heritage hotels which will grow the country's financial stability.

India’s natural and architectural heritage also creates scope for new modes of the tourist experience such as technology with cultural experience, traditional medicine and wellness with exploring natural landscapes, adventure activities in biodiversity parks, and localized products that can be priced anywhere from the competitive to the premium range which controls inflation.

Emerging Trends in the workspace, such as hybrid office management and flexible work-from-anywhere policies, could boost dependent sectors in tourist hubs around major metropolitan cities which can even solve unemployment issues as well.

The latest tourism policy aims to make India a top destination by 2030

Making India one of the top five global destinations by 2030 is the primary aim of the Indian government, which was finalised with certain additions considering the long-term implications of the ongoing pandemic, shared by the ministry of tourism. The policy was shared with ministries and states for feedback.

Rakesh Kumar Verma, additional secretary of, ministry of tourism, stated “ Idea is that post-pandemic, if the tourism industry has to be strengthened, also there should be a long-term vision. There are five important features in the policy, which we will take up as mission aims. The policy has been circulated among the ministries and state governments; after examining feedback from them, the process to inform the policy will be expedited, ”

To align with sustainable development aims, the policy says, the government will set up a National Green Tourism Mission to implement a national configuration, forging alliances with the private industries and also for destination planning, building and management.

The digital tourism mission is aiming to promote digitalisation by developing a unified tourism interface.

“Tourism and hospitality also contribute to employment generation. The Sectoral Skill Mission will make more people employable and check how those citizens are absorbed in the sector,” said Verma.

The National Mission on DMOs focuses on establishing synergy among stakeholders and government agencies and offers institutional support to promote destinations individually.

The Mission on Tourism MSMEs is proposed to enable companies to avail of various advantages being made available by the governments. The mobile application will be developed by tourism and home ministries for the verification of data at the time of immigration and customs clearance.

How the Indian government boosts the tourism sector with initiatives & offers.

100 % FDI is allowed in the tourism sector under the automatic route; and 100% FDI is allowed in tourism construction projects, including the development of hotels, resorts, and recreational facilities. Enabling government and regulatory initiatives like an extra outlay of US$ 316.3 million being earmarked for the Ministry of Tourism in the 2022-23 Union Budget will support tourism-linked businesses in the country.

In Health-wellness tourism be it faith-spiritual-study tourism, cultural tourism or heritage tourism or eco-tourism, youth tourism or business tourism, India is becoming the “most attractive tourist destination in the world”.

In November 2014, the government declared e-Visa for citizens of 44 countries in order to make it easier for foreign tourists to visit India. This facility now serves people from 165 countries, up from 44 after 4 years in 2018. Today the e-Visa is now available at 25 airports and five seaports around the country.

Today, the world is getting attracted to India’s yoga, philosophy, spirituality, and culture but when it comes to health tourism. The main goal of health-wellness tourism is to treat sickness and promote wellness.

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