Government initiatives The Government has allowed 100% foreign
investment under the automatic route in the hotel and tourism related
industry, according to the Consolidated FDI Policy, released by DIPP,
Ministry of Commerce and Industry, Government of India. The terms hotel
includes restaurants, beach resorts and other tourism complexes
providing accommodation and /or catering and food facilities to
The term tourism related industry includes:
Travel agencies, tour operating agencies and tourist transport
Units providing facilities for cultural, adventure and wildlife
experience to tourists
Surface, air and water transport facilities for tourists
Convention/seminar units and organisations
The Government of India has announced a scheme of granting Tourist Visa
on Arrival (T- VoA) for the citizens of Finland, Japan, Luxembourg, New
Zealand and Singapore. The scheme is valid for citizens of the above
mentioned countries planning to visit India on single entry strictly
for the purpose of tourism and for a short period of upto a maximum of
The government has taken up a number of initiatives to enhance the
tourism and hospitality sector performance and profits. Identification
and development of 37 destinations within the last
two years, and execution of 600 projects for 300 tourist spots across
the country with an investment of over US million are some projects
taken by the Government to boost the travel industry and create
awareness for the sector. These efforts have been coupled with
monetary assistance from the Central government to the tune of US$ 5
million and US$ 10 million, as per the Tourism report by the Gujarat
The Ministry of Tourism under the Marketing Development Assistance
(MDA) Scheme has also set up committees to assist and motivate travel
tour operators and help them to familiarise with international
standards of hospitality. Also, the Government provides financial
assistance to travel agents to participate in travel marts and annual
conventions for travel and tourism, as per the Annual report by the
Ministry of Tourism.
The Uttarakhand State Government has launched 100% tax exemption
program to exempt multiplex projects, amusement parks, and other
tourist facilities for a period of five years under the Vision 2020
document. On the same lines, Rajasthan has reduced the luxury tax level
to 8% from the existing 10% levels. Kerala, Madhya Pradesh, Orissa and
Gujarat have entered into Private Public Partnerships (PPP) to promote
travel and tourism to attract tourists.
According to the Eleventh Five Year Plan, a total of US2 billion is
planned to be invested in upgrading and modernising civil amenities
like bridges, ropeways, roads, telecom services, ports, and other forms
of transport as per a report by the Planning Commission.
Industry initiatives The Indian hospitality sector is expected to see
an estimated investment of US$ 12 billion in the next 2 years, and
various new industry initiatives are being taken up. Given the current
growth, demand-supply gap and investment norms (100% FDI allowed), the
country provides opportunities for International brands to enter India
with a long term commitment as stated in a report by the ministry of
India has emerged as the major destination for medical tourists from
across the globe. Lower costs combined with effective healthcare
therapies have attracted a number of foreign patients. The Indian
medical tourism sector valued at US$ 310 million, currently, receives
more than 100,000 foreign patients each year and is expected to reach
US$ 2 billion by 2012. With an annual growth of the sector projected at
30%, the number of medical tourists is anticipated to grow at a CAGR of
over 19% during the forecast period to reach 1.3 million by 2013.
To offer superior healthcare services, the government has adopted the
Public Private Partnership (PPP) Model to enhance the infrastructure
requirements of the sector with the expertise of private sector and
support of public sector.
Kerala, termed as ''God''s Own Country'' promises world class hospitals
coupled with cost-effective treatments and opportunities for tourists
to relax and enjoy. The state has been witnessing a steady growth in
the number of foreign nationals visiting the country for procedures
like knee replacement, weight reduction surgery, liver transplant,
cardiac care, ophthalmic care and dentistry.
Additionally, the Ministry of Tourism is aiming at leveraging India''s
potential in conventional systems of wellness and medicines, such as
Ayurveda, Siddha, and Yoga. The prominent American Association of
Physicians of Indian Origin (AAPI) has acknowledged Jaipur as the
center of medical tourism.
The Indian Hospitality industry, estimated at US$ 17 billion,
contributes 2.2% of India''s GDP. The sector is expected to grow to US$
36 billion by the end of 2018. Seventy per cent of the total
contribution (US$ 11.85 billion) comes from the unorganized sector and
the remaining 30% (estimated at US$ 5.08 billion) comes from the
organised sector of the hospitality industry.
The industry also witnessed an increase in the number of hotel rooms
with a growth of 5% during the last three to four years. In the next
two tears, a total investment of US$ 12.17 billion is expected that
will add over 20 new international brands in the hospitality sector.
The tourism and hospitality sector report by the Ministry of Tourism
suggests that the demands are expected to increase up to US$ 34.7
billion by the end of 2020. In order to promote this target, the
Ministry has already sanctioned the development of 169 rural sites
across the country. These sites have been selected based upon their
competencies for craft and handloom skills.
Statistics suggest a triple fold increase in the number of tourists
visiting the country. The sector has witnessed a steady growth from
four million travelers in 1998 to 11 million in 2008. As expected, the
figure in intended to reach a mark of 29 million visitors by 2018.
There is an opportunity in the inbound MICE sector (meetings,
incentives, conventions and events) which has already registered a
growth of 15% to 20% during the last five years as stated in the report
by the Ministry of Tourism.
Y Rajeev Reddy