Key Findings of the NITI Aayog Report
The NITI Aayog–Ministry of Tourism report "Unlocking Growth in Tourism and Hospitality Sector" provides a comprehensive analysis of India's tourism ecosystem, identifying critical bottlenecks and recommending transformative reforms.
Current Status of India's Tourism Sector
Global Context
- Global contribution: Travel and tourism contributed nearly 10% of global GDP in 2024, supporting 1 in every 10 jobs worldwide
- Projected growth: By 2035, the sector is expected to contribute USD 16.5 trillion, growing at 3.5% annually
- Tourism serves as a major employment generator, regional development catalyst, and low-logistics source of foreign exchange for developing economies
India's Economic Performance
- GDP contribution: Rs 15.73 lakh crore (5.22% of total economy) in FY 2023-24
- Employment: 84.6 million jobs (~20% increase over last five years)
- Domestic tourism: Record 2.9 billion visits in 2024
- International arrivals: 9.95 million Foreign Tourist Arrivals (FTAs) in 2024
- Global share: Sub-1.5% of global international tourist arrivals
Global Competitiveness Rankings (TTDI 2024)
| Category | India Rank |
|---|---|
| Natural Resources | 6th |
| Cultural Resources | 9th |
| Overall | 39th |
Government Tourism Promotion Initiatives
Major Schemes
- Swadesh Darshan Scheme (and Swadesh Darshan 2.0)
- PRASHAD Scheme - Pilgrimage Rejuvenation and Spiritual Heritage Augmentation Drive
- Dekho Apna Desh Initiative
- Incredible India (and Incredible India 2.0)
- Ek Bharat Shreshtha Bharat
- Paryatan Parv
- National Digital Tourism Mission (NDTM)
Digital Platforms
- NIDHI Portal - National Integrated Database of Hospitality Industry
- Utsav Portal
Support Schemes
- Loan Guarantee Scheme for Covid Affected Tourism Service Sector (LGSCATSS)
- All India Tourist Permit (AITP)
Challenges to India's Tourism Sector
Demand-Side Challenges (International Accessibility)
Restrictive Visa Regime
- UN Tourism Visa Openness Index score: 38.14 (below world average of 40, Asia-Pacific average of 46)
- Visa-free access: Only Nepal, Bhutan, and Maldives
- Visa-on-Arrival: Limited to Japan, South Korea, and UAE
- India's entry regime is less competitive than regional peers
Poor Visa User Experience
- Fragmented visa systems with repetitive data submission
- Complex application forms and technical glitches
- Payment failures with foreign cards
- Inadequate customer support
Weak Visitor Retention
- Absence of integrated destination marketing
- No loyalty programmes or repeat-visitor incentives
- Limited ability to retain high-value international tourists
Outbound Spending Leakage
- Tourism forex receipts (~USD 35 billion) trail Turkey, Thailand, and Saudi Arabia
- Outbound spending by Indian travellers running ~15% above pre-pandemic levels
- Demand "leaking" to destinations abroad
Supply-Side Challenges (Investment & Infrastructure)
Chronic Under-supply of Quality Accommodation
- Branded hotel inventory: Only ~0.2 million rooms (8% of total 2.48 million rooms)
- Project timeline: 36-48 months from approval to commissioning (vs 12-18 months in ASEAN)
- Financing costs: Hospitality lending rate of 11-14%
- Slow pace of capacity addition
High Compliance Intensity
- 50-60 approvals required across Central, State, and Municipal authorities
- Duplicative processes (multiple health trade licenses for different services)
- Redundant police-issued 'Eating House Licenses' for F&B services
Restrictive Building Standards
- Low Floor Area Ratios (FAR) and strict Ground Coverage limits
- Low High-Rise Thresholds (e.g., 15 meters in Kerala)
- Forces cost-intensive vertical construction
- Disincentivizes budget hotel development
Interstate Transport Barriers
- Despite AITP introduction, fragmented taxation persists
- Several states levy parallel entry taxes and road-use fees
- Vehicles staying in another state for 12+ months face cumbersome re-registration mandates
Environmental and CRZ Clearances
- SEAC reviews tourism projects alongside heavy industries and mining
- CAG audit: 89% of EC cases exceeded the mandated 105-day timeline
- CRZ clearances stalled by inaccurate/non-digitized High Tide Line (HTL) mapping
Recommended Measures
License Rationalization
- Integrate departmental approvals through National Single Window System (NSWS)
- Institute single health trade license and single liquor license for multi-outlet hotels
- Eliminate requirement for police-issued 'Eating House Licence'
Homestay Scalability
- Raise room cap for registered homestays from 6 to 9 rooms
- Eliminate NOC requirements from local panchayats/municipalities
Liberalizing Building Byelaws
- Remove arbitrary ground coverage requirements
- Increase base FAR limits to 1–4 on standard roads
- Raise high-rise classification threshold to 23 meters
Vehicle Re-registration Flexibility
- Amend Section 47 of Motor Vehicles Act, 1988
- Mandate re-registration only during permanent change of owner residence
- Leverage centralized VAHAN database for address updates
Visa Reforms
- Introduce 90-day, multiple-entry Tourist VoA for high-potential source countries
- Simplify e-Visa portal (reduce data fields)
- Minimize payment gateway failures for foreign cards
- Generate persistent unified traveller profile
Seamless Interstate Travel
- Extend AITP validity from 90 days to 5 years
- Abolish overlapping state-level entry taxes
CRZ and Forest Mapping
- Digitize High Tide Line (HTL) and Low Tide Line (LTL) mapping under CRZ Notification 2019
- Integrate high-resolution forest land maps with revenue records
- Accelerate forest land diversion approvals under Van Adhiniyam, 1980
Dedicated Appraisal Committees
- MoEFCC to constitute dedicated SEAC for tourism projects
- Expedite Environmental Clearances for tourism sector
Vision for Viksit Bharat @2047
The report envisions transforming India into a USD 3 trillion tourism economy by 2047 through:
- Shift from volume-driven to investment-led paradigm
- Regulatory reforms for improved Ease of Doing Business
- Comprehensive visa facilitation
- Strengthened tourism infrastructure
- Globally competitive tourism ecosystem