Passport to Prosperity: India’s Tourism Sector Sets Bold $59 Billion Target

India’s tourism industry, a crucial pillar of the nation’s fast-evolving economy, is poised to reach historic highs as new projections estimate sectoral revenue will surpass $59 billion (over ₹5.1 lakh crore) by 2028. With international visitor arrivals expected to climb to 30.5 million and domestic travel at an all-time high, industry leaders, global investors, and policymakers are celebrating the arrival of a “golden era” for Indian tourism.

 

Booming Domestic Travel Drives Growth

The biggest success story in Indian tourism is the dramatic surge in domestic travel. In 2023, Indian residents racked up a staggering 2.5 billion tourism visits—a monumental rise of nearly 45% from 2022’s figure of 1.73 billion. By 2030, domestic trips are forecast to more than double, surpassing 5.2 billion annual journeys. Factors fueling this escalation include improved air, rail, and road connectivity, innovative state tourism circuits, and a growing middle class with rising disposable incomes.

 

Major states leading this boom include Uttar Pradesh and Tamil Nadu, while Maharashtra and Gujarat continue to draw significant numbers of foreign visitors.

 

Foreign Tourist Arrivals: Headed for New Heights

India’s appeal to international travelers is equally on the rise. The sector is expected to welcome 30.5 million Foreign Tourist Arrivals (FTAs) by 2028, up from just under 19 million in 2023. The country’s unique blend of heritage, nature, culinary diversity, medical wellness, and spiritual experiences is drawing visitors from South Asia, Europe, North America, and beyond.

 

Luxury travel, palace resorts, Ayurveda retreats, and spiritual trails (notably in states like Uttarakhand and West Bengal) are seeing strong bookings, especially from high-spending audiences and the Indian diaspora.

 

Policy Pushes and Major Investments

The Indian government is aggressively supporting the sector through both budgetary allocations and innovative reforms. The Union Budget for FY26 earmarked over ₹2,500 crore toward tourism development, focusing on:

Multiple projects under the PRASHAD Scheme are upgrading sites from Andhra Pradesh to Uttarakhand, while private investments continue to flood into resort, hotel, and event (MICE) infrastructure.

 

The Luxury and MICE (Meetings, Incentives, Conferences, Exhibitions) Boom

Luxury remains a key driver of India’s new tourism growth, representing 17% of branded hotel inventory but boasting the highest occupancy and Average Room Rate (ARR) growth. Palace hotels, yoga and spa retreats, and cultural destination resorts are now booked out months in advance. MICE tourism—conferences, destination weddings, and large-scale events—adds billions to annual revenue, with the wedding industry alone contributing over ₹4.7 lakh crore in 2023.

 

Challenges and Opportunities

While India’s tourism outlook is largely positive, challenges such as price sensitivity, infrastructure bottlenecks (notably at major airports), and competition from global alternatives persist. The government is actively working to streamline visa processes, improve branding, and make travel both affordable and aspirational for every demographic.

 

Looking Forward

With a projected Compound Annual Growth Rate (CAGR) of up to 20% in some segments and domestic tourism the fastest-growing component, India is set to be a top global travel powerhouse by 2028. As the sector expands, its role in driving employment, foreign exchange earnings, and regional development will only become more central to the Indian economy.

 

Sources: BW Travel, IBEF, The Hawk, Capitalmind, ReportLinker, FICCI Sector Report