Tourism policy in India

In short

Tourism policy is the set of objectives, institutions, laws, incentives and schemes through which the Union and State governments plan, fund, regulate and market tourism. India has had three policy statements - 1982, the National Action Plan 1992 and the National Tourism Policy 2002 - plus a Draft National Tourism Policy circulated in 2022 that has not been formally notified; day-to-day policy therefore runs through Ministry of Tourism schemes, guidelines and the Budget rather than a single Tourism Act. It matters because tourism contributes roughly 5% of GDP and a high share of employment, is almost entirely delivered by States and private operators, and depends on visa, aviation, tax and environment decisions taken outside the tourism ministry. It is examined in BTTM/BHM papers on tourism policy and planning, in UGC-NET Tourism, and in interviews at State tourism departments, IRCTC, ITDC, IHCL, Thomas Cook, MakeMyTrip, IATO/TAAI member agencies and hotel chains, where candidates are asked which scheme funds what and who approves a star rating.

Explained

Who makes tourism policy, and the constitutional position

• Tourism is not named in the Seventh Schedule. It is developed as a State responsibility, with the Union acting through funding, coordination, promotion abroad and regulation of visas, aviation and monuments. Successive committees have asked for tourism to be put in the Concurrent List; it has not been.
• Ministry of Tourism, Government of India: policy, Central Financial Assistance to States, overseas and domestic promotion, hotel and tour-operator approval schemes, statistics (Market Research Division, *India Tourism Statistics*).
• Attached and allied bodies: India Tourism Development Corporation (ITDC - hotels largely disinvested, now events, consultancy, duty-free); Tourism Finance Corporation of India (project lending); NCHMCT and the IHMs; IITTM Gwalior (guide and management training); National Institute of Water Sports, Goa; Indian Culinary Institute. Tourism & Hospitality Skill Council (THSC) handles NSQF skilling.
• Advisory and industry side: National Tourism Advisory Council; IATO (inbound operators), TAAI (agents), FHRAI and HAI (hotels), ATOAI (adventure), ICPB (conventions). A statutory National Tourism Board has been proposed repeatedly and not created.
• Other ministries decide much of it: Home (visas and foreigners, now under the Immigration and Foreigners Act 2025, which replaced the Foreigners Act 1946); External Affairs (Passports Act 1967), Civil Aviation (UDAN, open-sky), Culture/ASI (monuments), Environment (eco-tourism in protected areas), Railways/IRCTC (Bharat Gaurav and tourist trains), Finance (GST, infrastructure status, FDI).
• States run their own tourism policies and incentive packages - Kerala Responsible Tourism Mission, Rajasthan's tourism unit policy, Madhya Pradesh, Gujarat, Uttarakhand's homestay scheme (Veer Chandra Singh Garhwali), Goa's coastal regulation - and register homestays, guides and adventure operators under State tourism trade rules.

The policy documents, in sequence

1. Tourism Policy 1982 - first formal statement; tourism recognised as an instrument of economic development and national integration; "travel circuits" concept; selective development of destinations.
2. National Committee on Tourism (1988, Mohammed Yunus committee) - recommended a National Tourism Board and treating tourism as an industry.
3. National Action Plan 1992 - 1991 reforms spirit: tourism as an export industry, special tourism areas, private investment, Heritage hotel category, a target for foreign tourist arrivals.
4. National Strategy for Promotion of Tourism 1996 / New Tourism Policy 1997 draft - interim statements; led to Explore India Millennium Year 2000 and the first Incredible India campaign (2002).
5. National Tourism Policy 2002 - the operative policy. Tourism as an engine of growth and employment; government as facilitator and catalyst, not operator; public-private partnership; seven conditions ("Seven S"): Swagat (welcome), Soochana (information), Suvidha (facilitation), Suraksha (safety), Sahyog (cooperation), Samrachana (infrastructure), Safai (cleanliness). Also pushed rural tourism, a tourist-friendly visa regime, and tourism as a State-level industry.
6. Draft National Tourism Policy 2022 - not notified; treat it as a draft in exams. Four strategic pillars: green tourism, digital tourism, destination management, and skilling/hospitality; five priority sub-sectors commonly listed as MICE, eco-tourism, adventure, heritage and wellness/medical; central ambition of raising tourism's contribution towards US$ 1 trillion by 2047 with a National Tourism Board and a Tourism Development Fund. Accompanied by the National Strategy for Sustainable Tourism, the National Strategy for Eco-tourism and the Rural Tourism and Rural Homestay policy (all 2022), and the Travel for LiFE programme.

Central schemes and instruments (what funds what)

• Swadesh Darshan (2014-15) - theme-based circuits (Buddhist, Ramayana, Krishna, North-East, coastal, desert, tribal, eco, heritage, spiritual and others). Swadesh Darshan 2.0 (2022) changed the unit from circuit to destination, with sustainability, destination management plans and private participation; around 50-plus destinations in 30-plus States/UTs. Challenge Based Destination Development (CBDD) selects destinations competitively in four categories - spiritual, culture & heritage, eco & amrit dharohar, vibrant villages.
• PRASHAD (2014-15) - National Mission on Pilgrimage Rejuvenation and Spiritual Heritage Augmentation Drive; infrastructure at identified pilgrimage and heritage sites (ghats, queue complexes, lighting, sanitation).
• SASCI tourism component (2024-25) - Special Assistance to States for Capital Investment: ₹3,295.76 crore sanctioned for 40 projects in 23 States as 50-year interest-free loans to States for iconic destinations.
• Assistance to Central Agencies and Tourist Facilitation/Information Centres; Adopt a Heritage 2.0 (Monument Mitras, under Culture/ASI) for CSR-funded amenities at monuments.
• Promotion: Incredible India and Incredible India 2.0 (digital, market-specific), Dekho Apna Desh for domestic travel, Atithi Devo Bhava for behavioural training, Market Development Assistance for approved operators, "Best Tourism Village" competition, Bharat Parv.
• Facilitation: e-Visa in categories e-Tourist, e-Business, e-Medical, e-Medical Attendant, e-Conference and e-Ayush, for nationals of roughly 165-170 countries (the list and fees change by notification); 24x7 multilingual tourist helpline (1363); Model Tourist Police scheme; Incredible India Tourist Facilitator Certification (online guide training).
• Data and standards: NIDHI (National Integrated Database of Hospitality Industry) for registering accommodation units; SAATHI hygiene self-certification; HRACC star classification (1-5 star, 5-star deluxe, Heritage categories) and voluntary approval of travel agents, tour operators, adventure tour operators, tourist transport operators.
• Fiscal and financial: 100% FDI under the automatic route in hotels and tourism construction-development; infrastructure status for qualifying hotel and convention-centre projects in the Harmonised Master List (threshold criteria have been revised more than once - check the current list); State capital subsidies, luxury-tax/stamp-duty concessions and single-window clearances; TFCI and SIDBI/MUDRA credit for small units.
• Note on promotion abroad: the Ministry's 20 overseas tourism offices were closed in 2023-24 and international promotion now runs through Indian missions - a frequently asked current-affairs point.

The legal framework tourism operates under

• No central Tourism Act. Instead: the Immigration and Foreigners Act 2025, in force from 1 September 2025, which repealed and consolidated the Foreigners Act 1946, the Registration of Foreigners Act 1939, the Passport (Entry into India) Act 1920 and the Immigration (Carriers' Liability) Act 2000 - hotel reporting of foreign guests is now Form C under the Immigration and Foreigners Rules 2025, not the old Registration of Foreigners Rules; the Passports Act 1967 (Indian passports) continues in force.
• Heritage: Ancient Monuments and Archaeological Sites and Remains Act 1958 and its 2010 amendment - 100 m prohibited and a further 200 m regulated area around a centrally protected monument; State antiquities and heritage laws.
• Environment: Environment (Protection) Act 1986 and EIA Notification 2006 (large resorts), CRZ Notification 2019 (beach tourism), Wild Life (Protection) Act 1972 with eco-tourism guidelines and core/buffer rules for tiger reserves under the NTCA, Forest (Conservation) Act 1980.
• Consumer and commerce: Consumer Protection Act 2019 and the e-commerce rules (applies to OTAs and package tours), Legal Metrology, FSSAI Act 2006 for all food service, Motor Vehicles Act 1988 for tourist permits (All India Tourist Vehicles Authorisation Rules 2021).
• Employment: the four Labour Codes in force from 21 November 2025 - Code on Wages, Industrial Relations Code, Code on Social Security, OSH & Working Conditions Code - replacing the Factories, Minimum Wages, Industrial Disputes and BOCW Acts that older textbooks cite for hotels.
• Tax: GST since 22 September 2025 runs on 5% / 18% / 40% slabs - hotel accommodation up to ₹7,500 per unit per day at 5% without input tax credit and above ₹7,500 at 18% with credit; standalone restaurants 5% without credit, restaurants in specified premises 18%; economy-class air travel 5%, other classes 18%; casinos, betting and race clubs in the 40% demerit slab. Income tax is now under the Income-tax Act, 2025, effective 1 April 2026, which renumbered all sections - cite provisions by name (for example the presumptive scheme for small businesses, or the deduction for new hotel/infrastructure undertakings) unless you are certain of the new number.
• Crisis policy: the Disaster Management Act 2005 was the basis of the 2020-21 travel restrictions and SOPs; a lesson now embedded in the sustainable-tourism strategy as resilience planning.

How a tourism policy is made and evaluated (process, as examined)

1. Situation analysis - inventory of attractions, demand data (FTAs, FEE, domestic tourist visits), carrying capacity, SWOT.
2. Vision and measurable objectives - arrivals, foreign exchange earnings, employment, GDP share, spread across States, length of stay.
3. Instrument choice - infrastructure spending, fiscal incentives, regulation, marketing, skilling, facilitation (visa, connectivity).
4. Institutional design - who implements: State tourism departments, development boards, special purpose vehicles, PPP concessions.
5. Resourcing - Budget allocation, Central Financial Assistance, external aid (ADB/World Bank State tourism projects), private capital.
6. Monitoring - Tourism Satellite Account, scheme-wise utilisation, third-party evaluation, destination management plans; Travel & Tourism Development Index as an external benchmark (India ranked 39 of 119 in the WEF 2024 edition; the index and ranking method change between editions).
7. Review and revision - the gap between the 2002 policy and the un-notified 2022 draft is the standard criticism.

Advantages, limitations and criticisms

• Strengths: scheme-based funding has built visible infrastructure at circuits and pilgrimage sites; e-Visa and UDAN transformed access; Incredible India gave India a single global brand; States compete through their own policies and responsible-tourism models.
• Limitations: no statutory basis or Tourism Act, so compliance is voluntary (star classification and operator approval are opt-in); policy is split across ministries with no single-window authority; the 2022 draft is still a draft; data on domestic tourism is weak and State-reported; multiplier claims rest on estimates.
• Equity and environment: benefits often leak to outside operators, hill and coastal destinations face carrying-capacity breaches (Himalayan hill stations, Goa, Andamans), and heritage sites face encroachment - the reason responsible tourism, eco-tourism strategy and LiFE were added rather than another promotion push.
• Over-dependence on a few destinations: a handful of States take most foreign arrivals, so "spread" is a standing objective.

Key points

• Tourism in the Constitution - not listed in the Seventh Schedule; a State subject in practice, Centre coordinates and funds.
• 1982 policy - first statement; travel circuits and selective development.
• National Action Plan 1992 - tourism as an export industry; private investment; Heritage hotel category.
• National Tourism Policy 2002 - the operative policy; government as facilitator; Seven S: Swagat, Soochana, Suvidha, Suraksha, Sahyog, Samrachana, Safai.
• Draft NTP 2022 - four pillars (green, digital, destination management, skilling); not notified.
• Swadesh Darshan 1.0 vs 2.0 - theme circuits vs destination-centric sustainable development with CBDD selection.
• PRASHAD - pilgrimage and spiritual heritage infrastructure.
• SASCI tourism - ₹3,295.76 crore, 40 projects, 23 States, 50-year interest-free State loans (2024-25).
• HRACC - Hotel and Restaurant Approval and Classification Committee; star rating is voluntary, valid for a fixed term, applied for by the hotel.
• e-Visa - six categories, roughly 165-170 eligible nationalities; list notified by MHA, not the tourism ministry.
• NIDHI / SAATHI - accommodation database and hygiene self-certification.
• Atithi Devo Bhava vs Dekho Apna Desh - behavioural/hospitality sensitisation vs domestic travel promotion.
• FDI - 100% automatic route in hotels and tourism construction-development.
• GST for tourism - 5% rooms up to ₹7,500 (no ITC), 18% above; 5%/18% restaurants; 40% on casinos and betting (since 22 Sep 2025).
• Labour - the four Labour Codes, in force 21 November 2025, govern hotel and travel employment.
• ASI rule - 100 m prohibited, 200 m regulated around a centrally protected monument.
• Tourism Satellite Account - the official basis for tourism's GDP and employment share (around 5% of GDP; employment share is reported higher and varies by edition).
• Measurement set - FTAs, FEE, FEE per arrival, domestic tourist visits, average length of stay, occupancy, RevPAR.

Formulas and examples

*Note on data: FTA, FEE and domestic-visit figures are revised every year in* India Tourism Statistics*; the numbers below are illustrative orders of magnitude for method practice, not quotable constants.*

1. Foreign exchange earning per arrival. FEE ≈ ₹2,30,000 crore with ≈ 9.52 million foreign tourist arrivals.

• FEE in rupees = 2,30,000 × 10⁷ = 2.30 × 10¹² ₹.
• FEE per FTA = 2.30 × 10¹² ÷ 9.52 × 10⁶ = ₹2.42 lakh per arrival (about ₹2,41,600). This is the figure policy uses to argue that one inbound tourist is worth far more in forex than one domestic visit - and why visa and connectivity policy targets inbound.

2. Domestic growth and CAGR. Domestic tourist visits 1,731 million (2022) to 2,509 million (2023).

• Growth = (2,509 − 1,731) ÷ 1,731 × 100 = 44.9% - a post-pandemic rebound, not a trend.
• Over 2016 (1,615 million) to 2023, n = 7: CAGR = (2,509 ÷ 1,615)^1/7 − 1 = (1.5536)^0.142857 − 1 = 1.0650 − 1 = 6.5% per year - the honest planning number.

3. Scheme arithmetic (SASCI). ₹3,295.76 crore for 40 projects.

• Average project size = 3,295.76 ÷ 40 = ₹82.39 crore.
• If a State receives 3 projects at the average, its share = 3 × 82.39 = ₹247.17 crore, i.e. 247.17 ÷ 3,295.76 × 100 = 7.5% of the outlay. Use the same method for Swadesh Darshan State shares in exam questions.

4. Tourism income multiplier with leakage. A new circuit brings ₹100 crore of tourist spending; 60% is re-spent locally each round (MPC = 0.6).

• k = 1 ÷ (1 − 0.6) = 2.5 → total income generated = 100 × 2.5 = ₹250 crore.
• Now assume imported goods, outside-owned hotels and taxes leak 30 percentage points, so only 30% is re-spent: k = 1 ÷ (1 − 0.30) = 1.43 → ₹143 crore. The fall from ₹250 crore to ₹143 crore is exactly the case for local sourcing, homestays and community ownership in the responsible-tourism policy.

5. Hotel performance and tax slab. A 120-room classified hotel, 70% occupancy for 30 days, ADR ₹4,500.

• Room-nights available = 120 × 30 = 3,600; sold = 0.70 × 3,600 = 2,520.
• Room revenue = 2,520 × 4,500 = ₹1,13,40,000 (₹1.134 crore); RevPAR = 4,500 × 0.70 = ₹3,150.
• Tariff ₹4,500 ≤ ₹7,500, so GST at 5% without input tax credit = ₹5,67,000 collected. If the same hotel repositioned at ADR ₹9,000, it would move to 18% with credit - the classic policy-design question on the ₹7,500 threshold distorting pricing.

Where it is used

• State tourism departments and development corporations (KTDC, MPTDC, RTDC, Gujarat Tourism) - preparing Swadesh Darshan/PRASHAD/SASCI proposals, destination management plans and utilisation certificates.
• Inbound and domestic tour operators (IATO/TAAI members, Thomas Cook, SOTC, Cox & Kings-type DMCs) - Ministry-approved operator status, Market Development Assistance claims, e-Visa advice, tourist vehicle permits.
• Hotels and resorts (IHCL, ITC, Oberoi, Lemon Tree, OYO-listed units) - HRACC star classification, NIDHI registration, FSSAI and CRZ clearances, GST slab planning around the ₹7,500 tariff line.
• Consulting, PMC and research roles - feasibility and DPR work for tourism projects, carrying-capacity and EIA studies, Tourism Satellite Account and visitor surveys for the Market Research Division.
• Skilling and guiding - IITTM-trained Regional Level Guides, Incredible India Tourist Facilitators, THSC/NSQF trainers, IHM faculty.
• Allied operators - IRCTC Bharat Gaurav trains and Dekho Apna Desh packages, UDAN-connected regional airports feeding circuits, Kerala's Responsible Tourism Mission linking homestays and local suppliers to resorts.

Interview questions

• Q: Which tourism policy is currently in force in India? A: The National Tourism Policy 2002; the 2022 document is only a draft and has not been notified, so current practice runs on the 2002 policy plus ministry schemes and guidelines.
• Q: What are the Seven S of the 2002 policy? A: Swagat, Soochana, Suvidha, Suraksha, Sahyog, Samrachana and Safai - welcome, information, facilitation, safety, cooperation, infrastructure and cleanliness.
• Q: Is tourism a Central or State subject? A: It is not listed in the Seventh Schedule; States develop and regulate tourism while the Centre funds, coordinates, markets India abroad and controls visas and aviation.
• Q: How does Swadesh Darshan 2.0 differ from the original scheme? A: 1.0 funded theme-based circuits spread across States; 2.0 funds selected destinations with sustainability criteria, destination management plans and competitive Challenge Based Destination Development selection.
• Q: What does PRASHAD fund that Swadesh Darshan does not? A: PRASHAD is specific to pilgrimage and spiritual heritage sites - ghats, queue management, sanitation and access at identified religious destinations.
• Q: Who gives a hotel its star rating, and is it compulsory? A: The Hotel and Restaurant Approval and Classification Committee of the Ministry of Tourism, on the hotel's own application; classification is voluntary and time-bound, though it affects incentives and credibility.
• Q: A foreign group wants to visit a monument-adjacent heritage hotel site - what legal limit applies? A: Under the AMASR Act 1958 as amended, no construction is allowed within 100 m of a centrally protected monument and the next 200 m is a regulated area needing NMA permission.
• Q: What GST applies to a ₹6,000 hotel room and a ₹12,000 room today? A: 5% without input tax credit on the ₹6,000 room and 18% with credit on the ₹12,000 room, under the slab structure effective 22 September 2025.
• Q: Why is the tourism multiplier lower in an island or hill destination? A: Most food, fuel and building material is imported and many operators are non-local, so leakage is high and less of each rupee is re-spent locally.
• Q: Name a State policy model that policy exams cite as good practice. A: Kerala's Responsible Tourism Mission, which links hotels to local farmers, artisans and community-run experiences and formally measures economic, social and environmental outcomes.
• Q: What is the biggest structural criticism of Indian tourism policy? A: It has no statutory backing or single nodal authority - the policy is a 2002 statement implemented through voluntary schemes while visas, aviation, taxation and environment sit with other ministries.
• Q: How is tourism's contribution to GDP officially measured? A: Through the Tourism Satellite Account, which separates direct tourism value added from the rest of the economy; WTTC's "total contribution" estimates are larger because they include indirect and induced effects.

Common mistakes

• Writing that the 2022 National Tourism Policy is in force - it is a draft; the 2002 policy is operative.
• Quoting FTA, FEE or domestic-visit figures without the year, or carrying 2019 pre-pandemic numbers as current.
• Confusing the schemes: Swadesh Darshan (destinations/circuits), PRASHAD (pilgrimage), SASCI (State capital loans), Adopt a Heritage (monument amenities under Culture).
• Saying star classification or tour-operator approval is mandatory, or that a State government awards stars.
• Citing the Factories Act, Minimum Wages Act or Industrial Disputes Act for hotel staff - these were replaced by the four Labour Codes in force from 21 November 2025; likewise quoting 1961 Income-tax Act section numbers after the 2025 Act renumbered everything.
• Using the simple multiplier 1/(1 − MPC) and ignoring leakage, then reporting an inflated income impact.
• Mixing up Atithi Devo Bhava (hospitality behaviour training) with Dekho Apna Desh (domestic travel campaign) and Incredible India (brand campaign).

Related topics

Tourism concepts and types · Tourism geography of India · Tourism planning and destination development · Sustainable and responsible tourism · Travel agency and tour operations management · Hospitality laws and tourism statistics.