India’s rich cultural heritage, amazing natural beauty, and magnificent monuments attract a large number of tourists from across the world. The country offers a diverse portfolio of niche tourism products like eco-tourism, rural tourism, religious attractions, medical/wellness tourism that involves Ayurvedic & spa therapies.
As a result, the Indian tourism industry is growing at a fast pace and is one of the key growth drivers among the service sectors in India. Based on most recent data from 2017, the industry’s total contribution to GDP was 9.4% and it generated 4.16 crore jobs in the country. The tourism and hospitality sector’s direct contribution to GDP was USD 91.3 billion in 2017.
Broadly tourism and hospitality industry includes the following:
There are multiple factors driving the growth of India’s tourism industry:
- Growing domestic demand: Increasing wealth & affluence has been driving domestic expenditure on tourism
- Improving Infrastructure: Capital investment in travel & tourism has been rapidly growing, reaching 2,70,610 crore in 2017
- Government Policies: Along with the launch of Incredible India 2.0 in 2018, theme based tourism circuits are being developed. 100% FDI has already been allowed in the tourism & hospitality industry
Some of the notable trends in the industry and initiatives taken are:
- India’s image as the seat of spiritualism and widespread practice of ayurveda, yoga, and naturopathy makes it a hot favourite amongst many international tourists
- E-tourist visa facility (launched in Nov 2014), visa issued electronically, which allows tourists and short term travellers to get an Indian visa quickly and easily on-line, is now available for citizens of 166 countries as of Dec 2018. In 2018, 2.37 million foreign tourists visited India via e-tourist visa, 0.44 million tourists had used the facility in 2015.
- Tourist police task force has been established by various state Governments for ensuring safety and security of tourists.
- Central Government has launched the “Pilgrimage Rejuvenation and Spiritual Augmentation Drive” to enhance facilities and boost infrastructure at pilgrimage centres across India.
- Under the “Swadesh Darshan” scheme 13 thematic circuits like Himalayan circuit, Buddhist circuit, wildlife circuit etc. have been identified for development. Under budget 2017, Rs.952 crore has been allocated for the same.
- In Budget 2018, Rs 2,150 crore was allocated to the Tourism Ministry, a jump of 21% compared to the previous year.
As India increasingly becomes a tourist favourite, you can benefit from this change by investing in the Incredible India smallcase. This smallcase is an intelligently weighted portfolio of stocks that serve the travel, tourism, and hospitality segments in India.
The Incredible India smallcase has marginally beaten the Nifty in the past 4 years, with a CAGR of 41.34% vs. Nifty’s 40.18%.