Tourism Can Support Forex Earnings Amidst Slowing Exports
GTRI urges Centre to treat inbound tourism as strategic export sector to boost forex earnings, create jobs
Chennai: Amidst slowing goods exports, inbound tourism can become a major source for forex earnings and job creation.
In 2023, India earned just $17 billion from foreign tourists which was far below Spain with $92 billion, Dubai $31 billion, and the Netherlands $31 billion, according to GTRI.
GTRI wants the government to make tourism a strategic export sector and recommends reimagining inbound tourism as a major source of forex earnings and job creation. “There is no lack of attractions in India, but high hotel taxes, visitor harassment, and predatory taxi practices should be addressed. This could unlock massive untapped economic value,” said Ajay Srivastava, founder, GTRI.
“With geo-political tensions in several parts of the world, we are at a sweet spot. The new season will start from September, and we need to put in place measures to attract more tourists,” said Iqbal Mulla, president, Global Tourism Council.
The government can make visas affordable and hassle-free. It can also provide visa free or on arrival for countries like the UK and the US, which are some of the top source markets.
According to Jaison Chacko, Secretary General, Federation of Hotel & Restaurant Associations of India, India’s hospitality and tourism sectors are charged with 18 per cent GST against 6-10 per cent rates in countries in the neighbourhood.
Further, the Tax Collected at Source for tourism packages can be withdrawn for this year to make India more attractive, said Mulla.
“India should raise its safety and hygiene standards and improve last mile connectivity. India, being diverse in geography, history, cuisine and culture, can provide all forms of tourism offerings. We should package ourselves as a hassle-free destination,” said Chacko.
The government estimates that tourism accounts for 6 per cent of the GDP and it may double by 2030. To make it happen, the government needs to work on lacunae in the sector.
Hospitality being a capital-intensive sector, priority sector status will help it get long-term credit at low interest rates. Further, industry status will bring down the power, water and local government charges by half and reduce operational costs.
Further, ease of doing business will be key to project implementation and operation. Single-window clearance for all state and central government licences and permits will make India competitive as a tourist destination, he said.
