Tourism industry in India is on a great boom at the moment. India has tremendous potential to become a major global tourist destination and Indian tourism industry is exploiting this potential to the hilt. Travel and tourism industry is the second highest foreign exchange earner for India, and the government has given travel & tourism organizations export house status.

The buoyancy in the Indian tourism industry can be attributed to several factors. Firstly, the tremendous growth of Indian economy has resulted in more disposable income in the hands of middle class, thereby prompting increasingly large number of people to spend money on vacations abroad or at home. Secondly, India is a booming IT hub and more and more people are coming to India on business trips. Thirdly, aggressive advertising campaign "Incredible India" by Tourism Ministry has played a major role in changing the image of India from that of the land of snake charmers to a hot and happening place and has sparked renewed interest among foreign travelers.

Travel & tourism industry's contribution to Indian industry is immense. Tourism is one of the main foreign exchange earners and contributes to the economy indirectly through its linkages with other sectors like horticulture, agriculture, poultry, handicrafts and construction. Tourism industry also provides employment to millions of people in India both directly and indirectly through its linkage with other sectors of the economy. According to an estimate total direct employment in the tourism sector is around 20 million.

Travel & tourism industry in India is marked by considerable government presence. Each state has a tourism corporation, which runs a chain of hotels/ rest houses and operates package tours, while the central government runs the India Tourism Development Corporation.

In the year 2002, the Government of India announced a New Tourism Policy to give boost to the tourism sector. The policy is built around the 7-S Mantra of Swaagat (welcome), Soochanaa (information), Suvidhaa (facilitation), Surakshaa (security), Sahyog (cooperation), Sanrachnaa (infrastructure) and Safaai (cleanliness).

Some of the salient features of the Tourism Policy are:

• The policy proposes the inclusion of tourism in the concurrent list of the Constitution to enable both the central and state governments to participate in the development of the sector.
• No approval required for foreign equity of up to 51 per cent in tourism projects. NRI investment up to 100% allowed.
• Automatic approval for Technology agreements in the hotel industry, subject to the fulfillment of certain specified parameters.
• Concession rates on customs duty of 25% for goods that are required for initial setting up, or for substantial expansion of hotels.
• 50% of profits derived by hotels, travel agents and tour operators in foreign exchange are exempt from income tax. The remaining profits are also exempt if reinvested in a tourism related project.

Apart from this, government has taken several other measures for the promotion of tourism. A multi-pronged approach has been adopted, 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.

The outlook for travel industry in India looks extremely bright. India as a tourism destination is the toast of the world at the moment. Conde Nast ranked India amongst the top 10 tourist destinations. JBIC ranked her as the fifth most attractive investment destination. Besides, India is probably the only country that offers various categories of tourism. These include history tourism, adventure tourism, medical tourism (ayurveda and other forms of Indian medications), eco tourism, cultural tourism, rural tourism, religious/pilgrimage tourism, spiritual tourism, and beach tourism etc.

Note: The above information was last updated on 21-07-2007