India's tourism challenge: Foreign arrivals remain below 2019 levels

India is yet to touch pre-Covid levels when it comes to foreign tourists visiting the country. The latest data for August 2023, released by the Centre for Monitoring Indian Economy (CMIE), shows that the number of foreign tourists arriving in India has shrunk by 19.7 per cent compared to August 2019, when 0.8 million visited.

However, there has been a notable increase in Indians tra­velling abroad. In August 2023, 2.5 million Indians travelled abroad — a 6 per cent jump from August 2019 (see chart 1).

CMIE data shows that in February 2020, just before the pandemic struck, 1.02 million foreign tourists had arrived in India. In August 2023, the number stood at 640,000.

The tourism ministry reite­rated its goal of attracting 100 million international tourists earlier this month, while the government envisions a $1 trillion tourism economy for India in the long term.

Bangladesh remains India’s largest source of foreign tourists, accounting for 23.7 per cent of all arrivals, followed by the US, UK, Canada and Aust­ralia, the ministry’s latest mon­thly report says (see chart 2).

 

The 2019 annual numbers reveal a similar mix. It was 23.6 per cent for Bangladesh, 13.8 per cent for USA, and similar numbers for UK (9.15 per cent), Australia (3.4 per cent) and Canada (3.2 per cent).

The Gulf stands out as the top destination for Ind­i­ans travelling abroad. The Un­i­ted Arab Emirates (25.2 per cent) and Saudi Arabia (11 per cent) accounted for over one-third of all Indians travelling overseas. Overall, the top five destinations — UAE, Saudi Ar­a­bia, USA, Thailand and Singa­pore — made for over 50 per cent of outbound Indians (see chart 3).

There were marginal chan­ges in the share of the top five destinations from before the pandemic. The top five in 2019 were UAE (23.72 per cent), Sau­di Arabia (10.83 per cent), USA (7.2 per cent), Thailand (6.48 per cent) and Singapore (5.94 per cent), accounting for a majority of outbound Indians.

Foreign exchange earnings from tourism have also fallen below the 2019 figures, registering at $2.3 billion in August 2023 compared to $2.6 billion in August 2019 (see chart 4).
 

The bulk of foreign tourist arrivals (45.6 per cent) were for leisure, holiday and recreation so far in 2023, compared to 57.1 per cent in 2019. Business and professional travel share drop­ped to 10.7 per cent from 14.6 per cent earlier. Medical tourism went up to 6.9 per cent from 6.4 per cent. The share of Indian diaspora rose to 25.4 per cent from 12.6 per cent in 2019.