BY ROBIN GHOSH
ECONOMIST AND BUSINESS MENTOR
KOLKATA, 5 FEBRUARY 2024:
The Indian tourism market is going through a bad patch. India’s domestic and international tourism business is yet to recover from the impact of covid pandemic.
All data available on the Indian tourism market display a slow recovery. Arrival of international tourists has remained stagnant and domestic tourists continue to be on a path of slow recovery.
The upswing in the tourism sector is getting delayed mainly because of negative pressures both from the supply and the demand side.
Take for example, from the supply side, look at the tax burden on tourism services.
- The GST rate hovers between 12 to 18 percent whereas in other Southeast Asian countries it averages around 7 to 9 percent.
- GST on Tour Operator’s services is 18 to 23 percent in India as compared to 6 to 8 percent in neighboring countries.
The tax burden is quite regressive leading to negative impact.
On the demand side, India is not the first choice of foreign tourism operators. Countries likeThailand, Malaysia and Vietnam heavily promote their tourism business and therefore steal the show.
Observe the innovative policies these South Asian countries have adopted. Free visa, tax refund, easing of visa rules are some of them.
Another major step taken by competing destinations is: powerful and immersive marketing thunder – unleased to bring foreign tourists inn large numbers.
For India to rekindle tourist interests, the need of the hour is to blast previously focused campaigns in international source markets.
At the moment, it appears that the focus of the Government is towards developing domestic tourism as compared to international tourism.
Unfortunately, tourism is still not reckoned as a growth multiplier, a change agent. A sector which offers huge employment opportunities for young men and women.
In the interim budget, we find the Government’s mute response to the tourism sector. No dynamic policy shifts are visible. Except announcing that funds will be made available to states to take up large tourism projects, – no specific turnaround measures have been crafted.
If the tourism sector has to play a major role as generator of employment and catalyst to upscale small business – a 360 degree shift is necessary.
New and newer business models have to be created at the micro level and at the macro level. Tourism sector must be recognized as a serious player for promoting growth, investment and employment.
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