India’s Travel and Tourism Industry Set for Explosive Growth, Forecasting $34 Billion by 2028

Wednesday, April 17, 2024

India’s Travel and tourism industry aims for $23.72B in 2024, with a CAGR of 9.62% through 2028, backed by 100% FDI in key ventures.

India’s travel and tourism industry is anticipated to achieve revenues of $23.72 billion in 2024, growing at a compound annual growth rate (CAGR) of 9.62% from 2024 to 2028, as estimated by the India Brand Equity Foundation (IBEF). This sector is forecast to expand to $34.25 billion by 2028. According to Invest India, the country has opened up to 100% foreign direct investment (FDI) in tourism ventures, including hotels, resorts, and leisure facilities starting in 2023, to stimulate sector growth and development.

Prime Minister Narendra Modi emphasizes that India’s tourism initiatives aim to preserve the nation’s rich cultural heritage while developing top-tier tourism infrastructure. The total FDI inflows into India for the fiscal year 2023-2024 were $17.96 billion, of which $11.54 billion was in FDI equity. This move is part of India’s broader strategy to enhance its tourism industry, positioning it as a vital element for economic prosperity and employment generation.

The Indian tourism sector shows great variety, with package holidays emerging as the dominant market segment, anticipated to reach a volume of $10.48 billion in 2024. By 2028, it is expected that 64.74 million users will engage with this market, increasing the user penetration rate from 7.8% in 2024 to 10.0% in 2028. The expected average revenue per user (ARPU) in this segment is projected at $209.70 by 2028, with 60% of revenue anticipated to come from online sales.

In line with worldwide trends, India is transforming its tourism sector with an emphasis on sustainable and eco-friendly travel, aiming to draw global travelers. The sector is projected to contribute $250 billion to the nation’s GDP by 2030, supporting 137 million jobs. Recently, on March 7, Prime Minister Modi initiated 52 tourism projects valued at over Rs 1400 crores under the Swadesh Darshan and PRASHAD Scheme, enhancing tourism infrastructure at pilgrimage and heritage sites, among others, and boosting community involvement in tourism.

At the same event, Prime Minister Modi launched ambitious campaigns such as ‘Dekho Apna Desh People’s Choice 2024’ and the ‘Chalo India Global Diaspora Campaign’ to engage both locals and the global Indian diaspora in promoting tourism and celebrating India’s cultural diversity.

The newly launched Swadesh Darshan 2.0 Scheme reflects the government’s dedication to comprehensive destination development and community involvement in tourism. With its robust infrastructure, evolving tech landscape, and increasing disposable incomes, India is on track to become a top global tourism destination. Through strategic initiatives and a commitment to sustainable practices, India is unlocking its potential to become a prime choice for travelers around the world.

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