NITI Aayog on Tuesday, 30 June released a report titled 'Unlocking Growth in Tourism and Hospitality Sector', warning that despite strong fundamentals, India's tourism outcomes remain well below potential — and pinpointing regulatory complexity, fragmented approvals, and visa barriers as the primary drag on international arrivals and investment.

The Scale of India's Tourism Economy

The sector is far from marginal. In FY 2023–24, tourism contributed ₹15.73 lakh crore (approximately $170 billion) to India's GDP, accounting for 5.22 per cent of the total economy. It supported an estimated 84.6 million jobs — a 20 per cent increase over five years.

Domestic tourism has been a standout performer, with 2.9 billion domestic tourist visits recorded in 2024, surpassing the pre-pandemic peak of 2.3 billion in 2019. India also counts 44 UNESCO World Heritage Sites, 106 national parks, and 18 biosphere reserves among its tourism assets.

Where India Falls Short

International performance tells a different story. India recorded approximately 20.6 million total international tourist arrivals — including non-resident Indians — in 2024, generating international tourism receipts of roughly $35 billion, a 9 per cent rise from 2023. Yet India accounts for less than 1.5 per cent of global international tourist arrivals.

More starkly, foreign tourist arrivals — a purer measure of core tourism demand — stood at just 9.95 million in 2024, still below pre-pandemic levels and substantially lower than regional peers such as Thailand, Malaysia, and Vietnam, the report noted.

Outbound travel compounds the concern. Indian travellers' overseas spending has exceeded pre-pandemic levels by approximately 15 per cent, pointing to a structural leak: demand for travel is robust, but a significant share is being captured by foreign destinations rather than the domestic tourism ecosystem.

What the Report Recommends

Rajiv Gauba, Member of NITI Aayog, said the core problem is not a lack of demand or resources. 'A central finding of the report is that India's tourism challenge lies not in demand or resource availability, but in enabling conditions. Despite strong domestic tourism and significant global interest, outcomes in terms of international arrivals, investment and value realization remain below potential. This gap is driven by regulatory complexity, fragmented institutional processes and procedural inefficiencies,' Gauba said.

The report's recommendations centre on rationalising regulatory requirements, removing redundancies, enabling risk-based compliance, and improving coordination across government levels. Specific measures include streamlining approval processes for tourism enterprises, reducing licensing burdens, improving permit regimes for tourist transport, and moving towards a more facilitative visa framework — including Visa-on-Arrival for select traveller segments.

Institutional Reform and Implementation

Beyond policy prescriptions, the report emphasises coordinated implementation through clearly defined institutional responsibilities and phased reform pathways. The objective, according to Gauba, is to create a 'more efficient and predictable regulatory environment, while maintaining necessary safeguards.'

This comes amid a broader push by the Centre to position tourism as a high-employment, high-forex sector. With outbound leakage rising and foreign arrivals still lagging pre-pandemic benchmarks, the pressure to convert India's unmatched heritage and wellness assets into realised economic outcomes has rarely been greater.