Development and Impact of Tourism Industry in India

4 Pages Posted: 18 Aug 2016

See all articles by D. Amutha

D. Amutha

St.Mary's College, Tuticorin

Date Written: August 17, 2016


Tourism Industry in India is one of the most profitable industries in the country and contributes substantially to foreign exchange earned. Today tourism is the largest service industry in India, with a contribution of 6.23% to the national GDP and providing 8.78% of the total employment. India witnesses’ more than 5 million annual foreign tourist arrivals and 562 million domestic tourism visits. The travel and tourism sector supported 25 million jobs in 2012 directly related to the tourism sector. Constituting 4.9 per cent of the total employment in the country in 2012, this is expected to amount to 31 million jobs by 2023. The demand for travel and tourism in India is expected to grow by 8.2 per cent between 2010 and 2019 and will place India at the third position in the world.

India's travel and tourism sector is expected to be the second largest employer in the world, employing 40,037,000 by 2019. With the expectation of further liberalization policies FDI in the tourism sector is likely to increase from the current US$450 million to US$1.5 billion by 2010 and increase the number of foreign tourist arrivals to 10 million in 2011. The recent inflow of FDI to India has helped to create 1980 new hotels with 109,392 rooms. In 2015, tourism is expected to generate 36.4 per cent of world gross domestic product; 14.05 per cent of global capital investments; 13.23 per cent of worldwide employment; and 32.14 per cent of worldwide exports of goods and services. Tourism industry in India is growing and it has vast potential for generating employment and earning large amount of foreign exchange besides giving a fillip to the country’s overall economic and social development. Despite of several efforts by the central and state government the growth of tourism industry is not getting that status which actually Indian Tourism deserves. It is time that India should search and make efforts on global market to offer the best product mix and adopting right strategies for the promotion of tourism.

Keywords: travel and tourism, foreign exchange, social development, employment, higher education, global economy

JEL Classification: a11

Suggested Citation

Amutha, D., Development and Impact of Tourism Industry in India (August 17, 2016). Available at SSRN: or

D. Amutha (Contact Author)

St.Mary's College, Tuticorin ( email )

Associate Professor of Economics, St. Mary's Coll
Thoothukudi, Tamilnadu 628001
9442091588 (Phone)

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