Strategic Infrastructure

Tourism Sector in India

India’s tourism sector, with its extraordinary heritage, cultural diversity, and geographical richness, has emerged as a global favorite and a powerful driver of economic growth. Recognizing its potential to generate employment and accelerate inclusive development, the Union Budget 2025–26 allocated ₹2541.06 crore for strengthening tourism infrastructure, skill development, and travel facilitation. A flagship initiative under this budget is the development of fifty top tourist destinations in partnership with states through a challenge mode, ensuring world-class facilities, modern connectivity, and an enriched visitor experience. These efforts underline the government’s vision of positioning tourism at the heart of India’s march toward becoming a developed nation by 2047.

Significance of Tourism for India

• Tourism contributes to India’s progress in cultural, economic, and diplomatic domains. Culturally, it revives traditional art forms and crafts, such as the Madhubani paintings of Bihar, while also supporting heritage conservation through initiatives like Adopt a Heritage and campaigns such as Dekho Apna Desh. Economically, tourism generated about 6.8 per cent of India’s GDP in 2024 and continues to create millions of jobs across sectors ranging from hospitality to handicrafts. Diplomatically, campaigns such as Incredible India have projected the richness of Indian culture to the world, with Yoga and Ayurveda enhancing India’s image as a global wellness destination.

Status of Tourism Sector in India: Data Bank

• India’s international standing in tourism is steadily rising. According to the World Economic Forum’s Travel and Tourism Development Index 2024, India ranked 39th. In 2023, the UN World Tourism Barometer placed India at 24th in terms of international tourist arrivals. That year, the country recorded 18.89 million international tourist arrivals, including 9.52 million foreign tourist arrivals (FTAs). These numbers signify a strong recovery after the pandemic and underscore India’s growing reputation as a premier destination for cultural, spiritual, and medical tourism.

Employment-Led Growth in Tourism

• Tourism has long been a significant employment generator in India. In FY23, the sector contributed around five per cent to GDP and created nearly 7.6 crore jobs. Foreign exchange earnings touched 28 billion US dollars in 2023, accounting for 1.8 per cent of global receipts and earning India the fourteenth position worldwide.
• The Union Budget 2025–26 reinforced this momentum by expanding training in Institutes of Hospitality Management, offering MUDRA loans for homestays, improving destination connectivity, and rewarding states for effective tourist management. Further measures, such as streamlined e-visas and visa-fee waivers, have been introduced to attract more foreign visitors.

Expansion of Tourism Infrastructure

• The development of tourism infrastructure in India is primarily the responsibility of state governments and union territory administrations. These bodies also take the lead in preparing tourist material and signage in local and vernacular languages. The Ministry of Tourism, however, complements their efforts by providing financial support through central sector schemes such as Swadesh Darshan (SD), Swadesh Darshan 2.0 (SD 2.0), the Challenge-Based Destination Development (CBDD) scheme, and the Pilgrimage Rejuvenation and Spiritual Heritage Augmentation Drive (PRASHAD). Financial assistance under these schemes is subject to the submission of detailed project reports (DPRs), availability of funds, and compliance with scheme guidelines.
• In addition, the Government of India has supported states through the Special Assistance to States for Capital Investment (SASCI) initiative, under which projects related to green mobility, signage, and other visitor amenities have been sanctioned. These projects are designed to create world-class tourist experiences while improving sustainability.
• A notable initiative under Swadesh Darshan is the Development of Tribal Homestays. This programme, undertaken in consultation with the Ministry of Tribal Affairs, aims to tap the vast tourism potential of tribal and hilly areas while simultaneously providing alternative livelihoods to tribal communities. Under this scheme, financial assistance includes up to ₹5 lakh for community needs, up to ₹5 lakh for constructing two new rooms per household, and up to ₹3 lakh for renovating existing rooms. States and UTs are required to identify suitable villages and beneficiaries in consultation with local communities. Funds are released to state agencies, which in turn disburse them transparently to beneficiaries. While the scheme does not specifically refer to the Panchayats (Extension to Scheduled Areas) Act, 1996 (PESA), it requires state authorities to implement it in line with existing laws and regulations.

Transforming Tourism Infrastructure through Budget 2025–26

• The Union Budget further emphasized infrastructure transformation by announcing the development of fifty top tourist destinations in challenge mode. States will provide land for hotels and allied infrastructure, which will be classified under the Infrastructure Harmonized Master List (HML) to attract investments. Additionally, forty projects across twenty-three states will benefit from interest-free loans amounting to ₹3295.8 crore for fifty years. The Swadesh Darshan 2.0 programme has already sanctioned thirty-four projects worth ₹793.2 crore, while ₹60 crore has been earmarked for skill development in tourism services.

Revitalizing Spiritual Tourism

• India’s spiritual heritage forms the backbone of pilgrimage-based tourism. The government has prioritized developing Buddhist circuits and other heritage destinations linked to the teachings of Lord Buddha, aiming to establish India as a global hub for Buddhist tourism. The PRASHAD scheme remains central to this vision, with its focus on enhancing infrastructure and amenities at pilgrimage and heritage sites.

Medical Tourism and the “Heal in India” Initiative

• Medical tourism continues to expand, supported by India’s unique ability to combine modern medicine with traditional wellness practices. The Heal in India initiative has positioned the country as a cost-effective and high-quality healthcare destination. With the Medical Value Travel market projected to grow from 2.89 billion US dollars in 2020 to 13.42 billion US dollars by 2026, India is becoming a global leader in areas such as cardiac care, neurosciences, oncology, rehabilitation, Ayurveda, and Yoga-based wellness.

Preserving Knowledge and Cultural Heritage

The Gyan Bharatam Mission has been launched to conserve and digitize more than one crore manuscripts housed in institutions and private collections. A National Digital Repository of Indian Knowledge Systems will be established to make these materials accessible to scholars and the public, thus linking cultural preservation with tourism.

GST Reforms and Tourism

• GST rationalization in 2025–26 has made tourism more affordable and inclusive. The GST on hotel rooms costing less than ₹7,500 per day was reduced from 12 per cent to 5 per cent, while buses with seating capacity of more than ten persons saw a reduction from 28 per cent to 18 per cent. Similarly, GST on art and cultural goods was lowered from 12 per cent to 5 per cent, directly supporting artisans and cultural industries.