India has more tourists than ever. So why is tourism in trouble?

Snigdha Sharma (0:00)

For several years now, India's Prime Minister Narendra Modi has been telling us Indians to see our own country before we see the rest of the world.

Rahel Philipose (0:08)

My dear citizens of India, today I am asking a small favor of you. Can you decide that before the 75th year of independence in 2022, we will at least go to at least 15 tourist destinations in India We will go even if there are difficulties. We will go even if there is no good hotel.

Sometimes, difficulties are useful for living.

Snigdha Sharma (0:44)

That was him making a passionate appeal for the same seven years ago during the annual Independence Day address from Red Fort in Delhi when India had turned 72 years old. So travel within India, spend your holidays here, have your weddings here, rather than in some foreign country. And so far, it looks like his appeals are working spectacularly. Indians are traveling inside India like never before. Domestic trips jumped 46 percent in a single year to more than 4 billion. It is close to double of what the country recorded before the pandemic. But here's the thing, that was only half his message. The other part, which he also most recently brought up again during his visit to Kyrgyzstan in a social media post, was this.

The Prime Minister also asked Indians to avoid foreign travel and to keep those rupees at home. And on that count, Indians seem to be politely ignoring the Prime Minister.

Foreign holiday travel has held up. Roughly 13 million Indians took a foreign holiday in 2025 And this is close to what they took the year before, and well above anything seen before the pandemic. So Indians are traveling more at home, and they're traveling more abroad. I mean, they're just traveling more. But somewhere underneath all of this, something else is also moving. Foreign tourists have been coming less and less to India. The country counted around 9 million foreign arrivals last year, a number that is also falling down, about 8% from the year before. In fact, even that 9 million needs a footnote. In an interview with Bloomberg, the head of India's Tour Operators Association estimated that once the medical travelers and the diaspora returning to see their family are set aside, the number of foreigners who came simply to holiday in India may be closer to 3 million. So on one hand, you have a country that has never been more full of travelers, and at the same time, it is also attracting fewer and fewer travelers from other countries.

And that raises a question that the arrival figures on their own cannot answer. When India builds a hotel now, or restores a temple town, or designs a holiday, who is it really building for?

Welcome to Daybreak, a business podcast from The Ken. I'm your host, Snigdha Sharma, and I don't change the news cycle. Instead, every day of the week, my colleague Rachel Varghese and I will come to you with one business story that's worth understanding and worth your time. Today is Thursday, the 10th of September.

When foreign tourists stop coming to a country, there's usually no shortage of explanations, and India has many.

This year's budget, in fact, tells a strange story. Turns out, India has almost stopped spending money to sell itself abroad. It set aside just 3.5 crore rupees to promote India to foreign travelers, which is down from about 32 crores that it actually spent two years earlier. This is a cut of nearly 90 percent. It has also cut, by the way, its domestic tourism promotion budget to nothing. But the government has not stopped spending on tourism. In fact, far from it. It has raised the Tourism Ministry's total budget to nearly 2,500 crore rupees. Of this, nearly 2,000 crore rupees is going towards developing tourist circuits and almost 250 crores to pilgrimage and heritage projects. So the money is there, it has simply stopped going towards persuading anybody to come, and it has gone towards building. And then of course, there are other problems as well.

Foreign governments often warn their citizens about scams and sexual violence in India with specific advice for women and solo travelers. Visas are another source of friction. This is not just an industry complaint. In fact, in its June tourism report, NITI-IOG itself identified restrictive visa access and friction in the application process as problems, and it proposed moving towards a targeted visa on arrival system.

And this year brought a new problem. The America-Israel war on Iran disrupted air routes and raised travel costs. India recorded a more than 14% fall in foreign tourists' arrival in April, and ICRA says that the conflict contributed to this contraction. So yes, there are plenty of reasons for a foreign tourist to think twice about coming to India. And the government's own numbers suggest that the problem is real. In 2024, India earned about 35 billion dollars from international tourism. Now, that number sounds quite nice until you compare it with countries like Turkey, Thailand and Saudi Arabia, which have earned more despite attracting far fewer people than India has the potential to serve. Niti Ayog says that India accounts for less than 1.5% of international tourist arrivals worldwide. And the official foreign tourist number tells the same story. India recorded close to 11 million foreign tourist arrivals in 2019 before the pandemic. And then it got back to nearly 10 million in 2024, and then fell to just over 9 million in 2025 This is an 8% decline in a single year and 16% below the pre-pandemic peak. Now, you may argue that a big chunk of this was because of COVID. But international tourism globally had covered to around pre-pandemic levels already by 2024 So we cannot say the same for India.