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For the first time in its 90-year history, India ranked as Rail Europe's second-largest market in 2023. India, which has consistently ranked in the top five markets, surpassed China and Japan to take second place. Rail Europe had a fantastic year; from 2022 to 2023, its revenue increased by 60% worldwide.
According to Indian online travel company EaseMyTrip, searches for European locations increased by 60% in August 2023 compared to the previous year. Daniel D’Souza, President and Country Head of Holidays at SOTC Travel emphasised that despite visa challenges and supply constraints, there’s been an exponential growth of 3X in demand for European travel.
"The rise in outbound tourism to the EU could perhaps be since India was roughly one year ahead of the rest of the world in terms of a pre-Covid recovery in 2022. Last year, India was 11% above 2019 levels for Rail Europe's business,” said the rail-ticketing company’s president and chief executive, Björn Bender.
With an annual growth rate of 6.33%, India's GDP was the fastest-growing in 2023, according to Statistics Time. Outbound travel increased in tandem with the expansion of the economy. Gaurav Patwari, VP, of Air Category, Cleartrip, stated, "Outbound travel in 2023 increased significantly by around 156 percent compared to 2019." It's concerning that India's outbound travel market has surpassed pre-COVID levels, but when it comes to inbound tourism, the recovery has been sluggish. In 2019, there were 10.93 million foreign tourist arrivals; however, up until October 2023, the (provisional) number of foreign tourist arrivals for the year was 7.24 million.
Source: India Tourism Statistics 2022 and 2023
Deficiencies in Indian Tourism Sector
Rail Euro's success can be attributed to its marketing strategy, which involved establishing partnerships with prominent Indian travel agencies such as MakeMyTrip, making significant investments in technology to enhance operations, and prioritising the expansion of both B2B and B2C partnerships in India. Many countries, such as Thailand, Malaysia, and Vietnam, are witnessing an increase in inbound travel due to simplified visa procedures. Citizens of China, India, and many other countries have been granted visa-free entry to Malaysia and Thailand for a duration of up to 30 days to boost tourism. Efforts should be made to streamline the visa process in India, considering that there are still many countries like China where e-visa facilities are not available, making the process tedious and unappealing.
Increased TCS negatively impacts Indian tour operators, as travellers bypass them and book outside the country, causing losses for both the government and operators. For transactions above Rs 7 lakh per financial year per individual, TCS increased to 20% from 5%. It effectively increases the initial cost by 20%, impacting the overall affordability for travellers. A rollback of the 5-20% tax collected at source is suggested to make travel more affordable.
A withdrawal of incentives to the inbound tour operators on their foreign exchange earnings which were being used for overseas marketing and promotions has discouraged inbound travel in India. This calls for re-establishing duty credit via the Service Export Incentive Scheme or introducing an alternative in the new Foreign Trade Policy. India’s budget for overseas promotion activities like Incredible India has been reduced by more than half this year to ₹167 crore, down from ₹525 crore two years ago causing the closure of Indian tourism marketing offices overseas, a lack of trained tourism manpower in Indian embassies who can do regular interaction and follow up with the foreign tour operators and a decrease in participation in international trade events. To tackle such issues, Ministry of Tourism officers should be posted at Indian consulates or embassies for regular interaction and follow-up with foreign tour operators. Marketing campaigns showcasing our culture, tourist attractions, and cuisine should be organised. With its beautiful forts and exotic locations, India should be portrayed as a luxury wedding destination.
Source: UNWTO
Source: Bureau of Immigration
Need for Government Intervention & ‘Travel In India’ Campaign
The revival of confidence to travel among tourists after the COVID-19 shock may take some time, though some green shoots are already visible with the initiation of domestic tourism to some extent. Government interventions in the form of promotion of Lakshadweep islands, Andaman and Nicobar islands, Ayodhya after the consecration of Ram temple, Jammu & Kashmir after the abrogation of Article 370, and North-east India have prominently increased the tourist footfall in India. Additionally, the recently happened Ambani wedding has grabbed eyeballs from all over the world towards Gujarat and Jamnagar in particular thereby breaking the stereotype of destination weddings taking place abroad. Rajasthan is yet another state that has emerged as the favourite haunt for all grand weddings, thereby encouraging tourism.
Indians are fueling a travel boom, jet-setting across the globe like never before. Bucking the global trend, India's Directorate General of Civil Aviation (DGCA) reports a surge in international travel, with 3.14 crore passengers flying in and out between April and September 2023. This figure outpaces the corresponding pre-pandemic period in 2019, signalling a robust recovery in the aviation industry.
This surge indicates a resilient recovery in outbound travel, propelled by a growing economy and heightened willingness among travellers to explore international destinations. ‘Travel in India’ is becoming the new norm. It’s time that India works on strengthening its tourism industry by taking inspiration from the tools and techniques used in Europe and other nations to boost tourism.
Authored by Kavya Goyal and Siya Nandy
Under the guidance of Research and Outreach Director Yashasvini Beri
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