Indian Tourism its potential avenues and challenges for growth: Riding on the service sector

Abstract

Given the countless activities and avenues for growth under the umbrella of services and the resilience that the service sector has acquired post 1991 reform period in India, it is not difficult to acknowledge that India’s service sector has finally arrived! The post recession survival of the Indian economy has largely been possible due to the contribution of the services sector to India’s GDP. This sector has been recognized as one posing innumerable opportunities, attracting FDI boosting employment and propelling exports. So much so for the opportunities; the challenges are also many.

The real challenge lies not only in maintaining standards in areas where India has established universal benchmarks such as IT and ITEs but a larger challenge lies in probing and developing traditional areas such as tourism and shipping where other countries of the world have far surpassed Indian standards, nevertheless, they present manifold opportunities for India. The number of Foreign Tourist Arrivals (FTAs) in India during 2010 increased to 5.78 million as compared to 5.17 million in 2009. Registering a growth rate of 11.8% during 2010 over 2009. This growth rate of 11.8% in 2010 for India was better than UNWTO’s projected growth rate of 5% to 6% for the world in 2010. Tourism continues to play an important role as a foreign exchange earner for the country. In 2010, foreign exchange earnings (FEE) from tourism were US$ 14.19 billion as compared to US$ 11.39 billion in 2009, registering a growth of 24.6%.Through this paper we attempt to understand and probe a traditional service area ; tourism as a service industry, its contribution to India’s economy, recent developments, opportunities and challenges.