Indian Tourism’s Growth Rate Mystery


The year 2004-05 saw tourism emerging as one of the major sectors for growth of the Indian economy; the foreign exchange earnings increased from Rs. 16,429 crore to 21,828 crore. In 2006, the tourism industry registered a growth rate of 17.3% in foreign tourist arrivals, which has been the highest in last 10 years. Foreign exchange earnings grew at an even higher rate 30.2%.

India’s tourism industry is thriving due to an increase in the arrival of foreign and greater than before travel by Indians to domestic and abroad destinations. The visitors are pouring in from all over the world: Europe, Africa, Southeast Asia and Australia. At the same time, the number of Indians traveling has also increased. Some tourists come from the Middle East to witness the drenching monsoon rains in India, a phenomenon never seen in desert climates.

Domestic tourists are also fueling the industry’s revival. Many of them escape from the summer heat in the plains to resorts in the Himalayan Mountains. One of the major beneficiaries last year was Kashmir, where a cease-fire between India and Pakistan has reduced violence, if not completely, at least enough to help revive the state’s sagging tourism industry.

Among the most favoured tourist destinations in India are Kerala for its scenic beauty, Agra for Taj Mahal, Khujraho for its sculptures and temples, Goa for its beaches and some pilgrimages.

Interestingly, the growth has come even as global tourism has dropped, due to the September 11 terrorist attacks in the United States, the outbreak of Severe Acute Respiratory Syndrome in East Asia, and the Iraq war. Even the disastrous tsunami didn’t affect India’s tourism industry, as tourist arrivals in India rose 23.5% in December 2004 and tourist arrivals crossed the 3 million mark for the first time in 2004. The disaster was expected to have a negative impact on India’s tourism in terms of large-scale cancellations of tourists to India, but nothing of that sort was seen.

There could be several reasons for the buoyancy in the Indian tourism industry. First, the upward trend observed in the growth rate of Indian economy has raised middle class incomes, prompting more people to spend money on vacations abroad or at home. Also, India is booming in the information technology industry and has become the IT center. The aggressive advertising campaign “Incredible India” by the government has also contributed to changing India’s image from that of a land of snake charmers to one sparking new interest among overseas travelers.

Recently, Indian government adopted a multi-pronged approach for promotion of tourism, which includes new mechanism for speedy implementation of tourism projects, development of integrated tourism circuits and rural destinations, special capacity building in the unorganized hospitality sector and new marketing strategy.

A nation wide campaign, for creating awareness about the effects of tourism and preservation of our rich heritage and culture, cleanliness and warm hospitality through a process of training and orientation was launched during 2004-05. The aim was to rebuild that sense of responsibility towards tourists among Indians and re-enforces the confidence of foreign tourist towards India as a preferred holiday destination. More than 6500 taxi drivers, restaurant owners and guides trained under the programme.

Government also took several other initiatives to promote Indian tourism industry and increased the plan allocation for tourism i.e. from Rs 325 crore in 2003-04 to Rs. 500 crore in 2004-05. Road shows in key source markets of Europe, ‘Incredible India’ campaign on prominent TV channels and in magazines across the world were among the few steps taken to advertise Indian tourism. In addition, a task force was set up to promote India as prominent health tourism destination.

However, in order to attract more visitors, India still needs to upgrade its airports, roads and other infrastructure to global standards. Even with the recent surge, tourist arrivals are just a mere percentage of those in such popular Asian destinations like Bangkok and Thailand.

Let’s hope that the coming years bring in a lot more tourists to the country.

Aparna Vyas

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