India’s tourism sector is no longer limited to historical monuments, temples, and natural attractions. Better roads, new airports, stronger rail connectivity, and experience-based tourism have strengthened India’s position on the global tourism map. As a result, India’s foreign exchange earnings (FEEs) from tourism reached US$ 35.016 billion in 2024, up 8.78% from US$ 32.189 billion in 2023.
Let us take a closer look at this growth story and understand how improved infrastructure and richer travel experiences are creating attractive opportunities for investors.
What’s Happening?
India’s share of global tourism continues to improve. The country accounts for 1.40% of international tourist arrivals and 2.02% of global tourism receipts. In 2024, International Tourist Arrivals (ITAs) reached 20.57 million, which was 8.89% higher than in 2023 and 14.82% above 2019 levels.
Foreign Tourist Arrivals (FTAs) stood at 9.95 million, while the number of Non-Resident Indians (NRIs) visiting the country reached 10.62 million. NRI arrivals increased by 13.22% compared to 2023.
From a regional perspective, Asia and the Pacific accounted for the largest share of FTAs at 43.00%, followed by Europe at 26.70% and North America at 23.10%.
Domestic tourism also remained strong. In 2024, India recorded 2,948.19 million domestic tourist visits, an increase of 17.51% compared to 2,508.82 million in 2023. Uttar Pradesh ranked first with 646.81 million visits, while Tamil Nadu followed with 306.84 million visits.
These figures clearly show that the growth of India’s tourism sector is not driven solely by foreign visitors. Domestic tourism has emerged as one of the sector’s biggest strengths.
How Has Infrastructure Changed the Picture?
One of the biggest drivers of tourism growth in India has been infrastructure development. Between 2004 and 2025, the National Highway network expanded from 65,569 km to 1,46,204 km. The pace of highway construction also increased significantly, from 11.6 km per day to 34 km per day.
During the same period, the number of airports increased from 74 to 160. The metro rail network expanded from 248 km to 1,013 km. Port capacity rose from 1,400 MMTPA to 2,762 MMTPA, while cargo movement on Inland Waterways recorded a 710% increase.
The impact of these developments is clearly visible in tourism. Access to pilgrimage destinations, hill stations, and emerging tourist hotspots has become much easier than before.
A notable example is the Kashi Vishwanath Corridor. Following its inauguration in 2021, tourist footfall in Varanasi increased from 6.7 million in 2017 to nearly 110 million in 2024.
Similarly, the Bairabi-Sairang rail line in Mizoram contributed to a 114.29% increase in tourist footfall during FY 2024-25. These examples demonstrate how improved connectivity can unlock tourism growth even in emerging destinations.
Today, tourism in India is no longer limited to roads and hotels. New segments such as cruise tourism, river tourism, and lighthouse tourism are also gaining momentum.
Support Received from Government Schemes
The government has launched several initiatives to strengthen tourism infrastructure.
Under the Swadesh Darshan scheme, 76 projects were sanctioned, of which 75 have been completed. The focus has now shifted to sustainable and responsible tourism through Swadesh Darshan 2.0, under which projects worth Rs 793.2 crore have been approved across 34 destinations.
The PRASHAD scheme aims to promote pilgrimage and religious tourism. Under this initiative, 48 projects have been approved with a total outlay of US$ 198.4 million, of which 25 projects have been completed.
Additionally, 42 destinations have been identified under the Challenge-Based Destination Development programme. The objective of these initiatives is not only to increase tourist arrivals but also to improve infrastructure, cleanliness, local employment opportunities, and regional development.
What Does This Mean for Investors?
The tourism sector represents a significant opportunity for India’s economy. In FY23, tourism contributed 5% to India’s GDP and supported employment for approximately 7.6 crore people. Improved connectivity is helping tourism expand beyond major cities into tier-II, tier-III, and rural regions.
This can directly benefit hotels, transportation providers, retailers, food service businesses, local guides, travel agencies, and MSMEs.
One of the key strengths of the tourism sector is its multiplier effect. When tourists visit a destination, their spending supports multiple industries, including hospitality, transportation, retail, dining, and local services.
To attract greater private investment, the government has included hotels under the infrastructure category. This could create long-term growth opportunities for the hospitality sector.
However, investors should also recognise that tourism is a seasonal, infrastructure-dependent, and policy-sensitive industry. Therefore, investment decisions should not be based solely on growth figures. Factors such as balance sheet strength, location advantages, occupancy levels, debt, and cash flow should also be carefully evaluated.
What’s Next?
India’s tourism sector is well-positioned for strong growth in the coming years.
Initiatives such as ‘Heal in India’ are expected to boost medical tourism as well. The medical tourism market is projected to reach US$ 13.42 billion by 2026.
Future growth will depend not only on attracting more tourists but also on delivering better experiences. If India continues to improve connectivity, cleanliness, safety, digital infrastructure, and local experiences, it can move rapidly towards becoming a global tourism hub.
Overall, tourism is more than just a source of revenue for India. It has the potential to become a powerful driver of employment generation, regional development, MSME growth, and broader economic progress.
Disclaimer: This article is for educational and informational purposes only and does not constitute investment advice or a recommendation to buy or sell any securities. The companies mentioned are cited as examples within the context of market developments. Investors are advised to conduct their own due diligence and consult their financial advisor before making any investment decisions.
Investments in the securities market are subject to market risks. Read all related documents carefully before investing.
