This article has been contributed by Heniel Rupaarelia, Founder, Managing Director at ETrav Tech Ltd
India is awakening to an unprecedented surge in tourism. Once viewed as a minor contributor to GDP, it has now taken a centrestage, and is expected to double its economic impact from INR 14 trillion to INR 34 trillion, in the coming years. Revenues are predicted to surpass $59 billion by 2028, indicating a structural change that might revolutionise the way the economy operates.
The revised GST slab effective Sept 22 reduces GST rate on meals at restaurants and hotels priced under INR 7,500 per night to 5%, while maintaining the 5% rate for economy class flight tickets and increasing it to 18% for premium cabins. This change encourages families, young tourists and consumers in tier-II and tier-III cities to spend more on experiences and stays by making mid-range travel and dining reasonable. This surge will transform travel, create jobs and strengthen domestic and international tourism ecosystem.
Tourism Revenues
Improved infrastructure, increased disposable incomes and shift in travel attitude among Indians are factors driving the growth of the nation’s tourism sector, and domestic travel is the major contributor. Apart from exploring popular towns and hill stations, tourists these days are more keen on exploring uncharted territories. This shift in travel preference is boosting small businesses, hotels, transportation and dining facilities, hence, creating a network of economic activity that benefits offbeat tourist destinations. There is also a notable increase in the number of foreigners visiting the country. This in turn, helps increase foreign exchange and raises awareness globally. Domestic and international travel are acting as twin levers, driving the sector and the economy to new heights.
The Multiplier Effect: Tourism’s Broader Impact
A single trip can generate multiple revenues through hotels, restaurants, local transport, retail and even for the local artisans. Example- pilgrimage sites like Varanasi, Tirupati and Amritsar experience a great deal of economic activity outside of the temple walls, which benefits whole networks of small enterprises and service providers.
Rural and semi-urban areas are also impacted by this multiplier effect, which transforms isolated locations into hubs of the economy. Growth beyond the hospitality industry is propelling entrepreneurship and local jobs in places like Ladakh, the Andaman Islands and Arunachal Pradesh. Digital reservations, effective inventory management and insights that boost reach and income help regional operators capitalise on this expansion.
Sanvi Barjatya
Domestic Tourism: The True Growth Engine
A slight increase in the frequency of domestic travel generates a tidal wave of demand specially amongst the middle-income group. Long weekends and affordable airfares turn destinations like Jaipur, Udaipur Rishikesh and Goa into year-round hotspots as hotels report record occupancy. Moreover, newer segments are also flourishing, be it the youth opting for treks in the Himalayas or the Western Ghats, families going for coastal getaways and professionals blending work and leisure in India’s emerging wellness hubs
What makes this moment different is how technology is bridging the gap between curiosity and convenience. Digital platforms are equipping travel agents with tools to personalise itineraries, automate bookings and connect even the smallest operators to a wider pool of travellers. This not only enhances the consumer experience but also stimulates genuine economic growth in local communities by channelling real growth into local economies. A homestay in the Northeast, a rafting operator in Rishikesh, or a boutique café in Goa can now reach audiences they never had access to earlier.
Policy Focus: Enabling Sustainable Growth
The government’s push is central to tourism’s leap from a INR 14 trillion sector today to a projected INR 34 trillion by 2034. With INR 2,541 crore earmarked in Budget 2025-26 for tourism, schemes like Swadesh Darshan 2.0 and PRASAD are strengthening cultural circuits and pilgrimage hubs, while major connectivity upgrades such as the INR 3,169-crore railway line expansion in Bihar and INR 5,600-crore ropeway projects in Himachal are opening new regions for travellers. By increasing capacity and dispersing tourist flows outside of crowded areas, these investments provide the industry more space to grow responsibly. But infrastructure alone won’t deliver the full potential. Small operators, homestays and local guides must also be digitally equipped to benefit from this growth, ensuring that government spending translates into shared prosperity across India’s tourism value chain.
Ria Sahni
Shaping the Future of Indian Tourism
Accessibility, effectiveness and high-quality service must be balanced with the rapidly increasing demand for travel. Today, technology is not just a facilitator but the force behind India’s tourism industry, allowing for more intelligent and sustainable expansion.
India looks at tourism not just as a revenue generator but as an opportunity to redefine how we travel, connect and grow as a nation. With supportive policies, wider adoption of technology and a strong focus on domestic travellers, the sector has the power to create livelihoods, strengthen local economies and showcase India’s cultural richness to the world.
The increase from INR 14 trillion to INR 34 trillion is about inclusivity, empowerment and long-term effects. This journey will shape the future of tourism and the narrative of India’s growth story.
Nitin Konde
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