India’s Tourism Sector Projected To Reach Rs 35 Trillion By 2029

The Union Budget 2025’s focus on infrastructure, employment, and medical tourism further strengthens the sector’s trajectory. As Tier-II and Tier-III cities emerge as significant contributors, and travellers seek diverse experiences—from luxury stays to spiritual sojourns—India is poised to be a global powerhouse in travel and tourism

Outbound Travel Mart (OTM) 2025 inaugurated by Chief Guest Gajendra Singh Shekhawat, Union Minister of Tourism and Culture, showcases exclusive participation from several countries that have chosen this event as their only major travel showcase in the region.

According to an Expedia report, by 2025, there is an anticipation of 13.9 million leisure departures from India, resulting in 19.4 million Indian visitor arrivals abroad, notably driven by Tier II and Tier III cities. Business travel accounts for 26 per cent of outbound trips, making India one of the largest global markets for business travel.

By 2029, the Indian tourism sector is projected to experience annual growth of 6.7 per cent, reaching a total value of Rs 35 trillion, constituting 9.6 per cent of the nation's GDP.

The estimated number of outbound trips from India is set to reach 29 million by 2025 and India's outbound tourism market is expected to generate revenues of about $ 62 billion by 2026.

In her Union Budget 2025 speech on February 1, Finance Minister Nirmala Sitharaman outlined ambitious plans to elevate India's tourism sector, with a focus on developing the country's top 50 tourist destinations. The initiative, aimed at enhancing both domestic and international tourism, will be carried out in partnership with State governments.

This move is set to boost employment, improve infrastructure, and showcase India’s diverse cultural heritage, positioning the country as a global tourism hub. Here’s how the Budget 2025 will shape the future of tourism in India.

The Union Budget 2025 prioritizes tourism as a key growth engine, offering opportunities for employment generation and infrastructure enhancement. To this end, the government will invest in developing the top 50 tourist destinations across India. These destinations will be upgraded in partnership with the states, fostering job creation and driving economic growth in local areas.

In a bid to encourage effective destination management, states will be given performance-linked incentives. This initiative is expected to motivate states to enhance the quality of their tourist spots, ensuring better facilities, cleaner environments, and improved services for visitors.

To boost the hospitality sector, the Finance Minister also proposed the inclusion of hotels in a harmonized scheme, promoting uniform standards across the industry. Additionally, MUDRA loans will be made available for homestays, providing an opportunity for small businesses and individuals to enter the tourism industry. This move aligns with the government’s push to decentralize tourism and boost local businesses.

One of the standout announcements is the government’s plan to give special attention to destinations related to the life and times of Lord Buddha. These historical and spiritual sites are expected to see infrastructure upgrades, attracting both domestic and international visitors, and strengthening India’s position as a global spiritual tourism hub.

Sitharaman emphasised the promotion of medical tourism, with a special initiative called 'Heal in India.' This initiative will be carried out in partnership with the private sector and will include facilitating easier visa norms for international patients. This move is set to make India a premier destination for medical treatments, offering world-class healthcare services at competitive prices.

From the development of iconic destinations to fostering medical tourism, the Union Budget 2025 paves the way for a thriving tourism industry that generates employment, attracts investments, and enhances India’s global presence.

India's tourism sector is a significant economic multiplier and is becoming increasingly important as the country strives for rapid economic growth and employment creation. India is covered in beauty in all its nooks and corners. This nation's expansive landscape is decorated with the most diverse populations, cultures, and topographies. India also provides various geographical regions, world-class tourist attractions, and specialised travel services, including eco-tourism, heritage tourism, adventure tourism, and medical tourism.

India's travel industry has been growing rapidly in recent years, with more people traveling abroad and spending more on travel. This growth is due to a number of factors, including rising wealth, a young population, and increased disposable income.

Indians are venturing beyond traditional hotspots, with a 25 per cent surge in those taking three or more trips annually. Tier-2 and tier-3 cities are embracing spiritual sojourns, witnessing a 97 per cent spike in searches for religious destinations.

Family travel is on the rise, boasting a 64 per cent uptick in bookings, while solo traveler bookings follow closely with a 23 per cent increase.

Last-minute hotel bookings are prevalent for domestic leisure trips, while alternative accommodations witness a 24 per cent surge in demand. Families seek premium stays, with 20 per cent searching for properties exceeding Rs 10,000 per night.

"The outlook for the next decade is looking very positive with India accounting for one in five of all new Travel & Tourism jobs globally," stated Julia Simpson, President & CEO of the WTTC (World Travel and Tourism Council).”