Make Indian tourism & hospitality sectors more resilient, sustainable

Deepak Bagla, CEO, Invest India, says that the Indian industries have demonstrated their resilience and tourist and leisure activities have showcased a promising and consistent growth through the pandemic

Whether the breathtaking tropics of coastal Karnataka or the rugged peaks of arid Ladakh, India is blessed with picturesque topographic diversity. Our 28 states and eight union territories are culturally rich and home to a long history and vibrant heritage. Traversing the country is, therefore, a constant visual delight. The dynamism of India’s landscape lends itself to the country’s tourism sector that is rapidly evolving to cater to the modern traveller through a broad range of services and experiences.

A rising global and domestic interest in experiencing India has led to the development of popular pilgrimage circuits like the Buddhist and Ramayana Circuits. Newer concepts of experiential living such as heritage homes and havelis have also sprung up across the country. The emergence of India’s Northeast Region (NER) as a popular destination for tourists, furthermore, has diversified tourist destinations and augmented local economies.

Today, India is at the cusp of a major transformation. The tourism and hospitality sectors are emblematic of this journey. With an emerging middleclass and the country’s evolving economic status, tourism and hospitality in India have emerged as the key drivers of economic growth and job creation. Not only are these sectors expanding, but also diversifying their offerings to include novel experiences and venues that, only a few years ago, were unheard of in India. Timeshare, eco and wellness resorts, seaplanes and river cruises are among such emerging experiences that have found a large audience among both domestic and foreign tourists alike.

Consequently, tourism in India has become a prominent source of foreign exchange and investments inflow to India. In 2019-20, the sector attracted nearly US$ 3 billion and contributed to 6.8 per cent of Indian GDP.  India’s travel and tourism industry’s direct contribution to national GDP, at US$ 42.1 billion, is the eighth highest in the world, far surpassing the global average of US$ 7.4 billion. Favourable FDI regulations, spearheaded by the Government of Prime Minister Modi, have opened the sector to 100 per cent investments through the automatic route, thereby supporting the emergence of new hotels, roads and other tourism-associated facilities.

Testament to our growing popularity as a tourist destination is India’s steep climb on the Travel and Tourism Competitive Index (TTCI) of the World Economic Forum where we jumped from the 65th to the 34th place between 2013 and 2019.  Our popularity among global travellers is well reflected in our foreign tourist arrival figures. India welcomes 15.54 million tourists in 2019, of which 2.9 million (marking a year-on-year growth rate of 23.6 per cent) arrived through the e-Tourist Visa facility. Because of its growing strengths and opportunities, the Indian tourism sector is also an important job creator. In 2019-20, it created over 79 million new jobs, marking a 15 per cent share in the country’s employment that fiscal year. These growth rates are not standalone figures but a deeper reflection of India’s consistently high economic growth and increasing purchasing power, its buoyant aviation sector and the plethora of government initiatives and schemes that support the industry.

Such Government assistance was especially important in the context of the Covid-19 pandemic that disrupted life as we knew it and created a ‘new normal’ wherein travel had life-threatening consequences. Lockdowns across the globe adversely impacted global tourism and recreational activities, leading to loss of incomes for millions engaged in the tourism and hospitality sectors. The Indian tourism industry also suffered considerably.

To support the hospitality sector in these trying times, the Union Ministry of Tourism announced the conversion of hotels into dedicated quarantine facilities. The ministry launched the ‘Stranded in India’ portal to assist foreign tourists unable to return home and extended the validity of approvals and classifications of hotels and restaurants. They utilised this period to reinvent Indian tourism by focussing on digital innovation and supporting new concepts like ‘staycations’ and ‘workcations.’ The announcement to provide the first 5,00,000 free e-tourist visas till March 2022 to foreign travellers from 169 countries too was a boon for the industry. Furthermore, the Government’s decision to appoint dedicated tourist officers in 20 Indian embassies in countries with large tourist inflows to India will serve to enhance our global tourism market share and help India emerge as a preferred tourist destination.

In the F&B segment, the Government has been proactively pushing for investments and higher innovation and value addition. The very attractive Production Linked Incentive (PLI) scheme in the food processing industry is pushing Indian manufacturing to expand its footprint in the demand for healthier, hygienically prepared, and packed foods.  

At Invest India, the National Investment Promotion and Facilitation Agency, we are at the forefront of driving investments into our experiential services sector, particularly tourism, wellness, and Ayurveda, and are actively inviting international hotel and resort chains to India’s booming market. We also house the Ministry of Tourism’s dedicated ‘Tourism Desk,’ established to provide tailored support and handholding to investors exploring India’s tourism and allied industries. At present, our tourism team is facilitating the market entry of several new clients, in addition to providing policy and investments related advisory to the Ministry of Tourism.

India is a rapidly growing and dynamic market in the tourism, hospitality and F&B sectors, with plenty to offer in sightseeing, cultural immersion and historical exploration. Through the pandemic, Indian industries have demonstrated their resilience and tourist and leisure activities have showcased a promising and consistent growth. This has been made possible largely due to our highly acclaimed Covid19 vaccination campaign. Only a few days ago, India decided to reopen its borders after nearly 20 months of restrictions to fully vaccinated foreign tourists from over 90 countries. A long-awaited decision, it shows our resolve to rejuvenate Indian tourism, hospitality and allied sectors and make them more resilient and sustainable in the coming years. 

This article was published in BW hotelier issue dated '' with cover story titled 'INVESTMENT SPECIAL ISSUE VOL 7, ISSUE 6'

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