India’s travel industry is not expected to face immediate impacts from the rupee’s depreciation against the US dollar. On Monday, the rupee dropped past 86 against the dollar, marking its steepest single-day fall in nearly two years. However, experts warn of long-term effects on outbound tourism, particularly influencing flight prices and accommodation costs.
Conversely, the depreciating rupee makes India more attractive to foreign tourists, potentially boosting inbound tourism.
Ramalingam Subramanian, president of Cox & Kings (a travel company owned by Wilson and Hughes), and Chirag Agarwal, co-founder and chief operating officer of TravClan (a business-to-business platform for travel agents), highlight rising travel expenses.
“Every aspect of travel — airfares, hotels, and local expenses abroad — has seen a noticeable increase, often by 10–15 per cent,” said Subramanian.
“As an operator, we focus on cushioning currency fluctuations for customers by securing better deals with global partners, using hedging mechanisms, and adopting dynamic pricing models to maintain cost transparency and stability,” he added.
Many travellers are now opting for domestic destinations such as Goa, Kerala, Rajasthan, Lakshadweep, Himachal Pradesh, and the Northeast, which offer breathtaking landscapes, cultural experiences, and affordable accommodations.
Internationally, Cox & Kings note increased bookings for Thailand, Vietnam, and Indonesia due to their lower cost of living.
“In our experience, travellers adjust budgets or itineraries rather than compromise on their preferred destinations. Destinations with stronger purchasing power against the rupee remain popular, especially with the growing demand from first-time travellers,” said Agarwal.
Anand Ramanathan, partner and consumer industry leader at Deloitte India, described the rupee’s depreciation as a double-edged sword. “While it boosts inbound tourism by 8–10 per cent as seen in past currency weakness, it also increases outbound travel costs, reducing demand for international trips (leisure and business) by 12–15 per cent due to higher airfares and accommodation expenses,” he explained.
Rajiv Mehra, general-secretary of the Federation of Associations in Indian Tourism and Hospitality and President of the Indian Association of Tour Operators, noted that the current depreciation would not majorly affect inbound tourist flow.
According to TravClan, Indians typically plan international travel well in advance, mitigating the impact of recent exchange rate fluctuations on booking patterns.
Mehra added that to increase foreign tourist arrivals, India needs to focus on source market promotion, visa facilitation, safety, security, and reducing heavy taxation in the hospitality industry.
“If this rupee depreciation continues, India might benefit, but other countries like Sri Lanka and Thailand have experienced similar or greater currency depreciation, neutralising any big advantage for India,” Mehra explained.
On the move
> Domestic destinations like Goa, Kerala, Rajasthan, Lakshadweep, Himachal Pradesh, and the Northeast are gaining popularity due to the weak rupee
> Countries like Thailand, Vietnam, and Indonesia are seeing increased bookings, thanks to their lower cost of living
> The depreciating rupee boosts inbound tourism by 8–10%, making India more affordable for foreign tourists
> Outbound travel costs for Indian citizens rise, reducing demand for international trips by 12–15% due to higher airfares and accommodation expenses
 "Indians exploring wallet-friendly routes amid rupee dip against US dollar")
