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Tourism: A Tariff-Proof Sector
Context:
Tourism has been highlighted as a resilient economic sector, capable of generating employment, boosting GDP, and insulating the economy from global trade shocks amid rising protectionism.
Tourism as an Economic Driver
- In 2024, tourism generated $28 billion (?2,45,000 crore) in foreign exchange for India.
- The sector accounts for around 7% of India’s GDP, with projections to reach 10% of global GDP share if nurtured effectively.
- It generates high employment intensity across diverse segments like hospitality, handicrafts, wellness, adventure, and medical tourism.
Resilience to Trade Shocks
- Unlike merchandise exports (steel, textiles, electronics), tourism is not vulnerable to tariffs, quotas, or trade wars.
- The sector provides a stable foreign exchange inflow, acting as a buffer against global economic fluctuations.
Union Budget Provisions (2024–25)
- Announced plan to develop 50 destinations as world-class tourist hubs.
- Emphasis on infrastructure development, branding, digitalisation, skill enhancement, and sustainability.
- Focus on shifting India’s positioning from a “place to see” to a “place to experience.”
Multiplier Effect
- Tourism stimulates growth in transport, handicrafts, agriculture, food services, and IT.
- It generates wide-ranging direct and indirect employment, especially in semi-urban and rural regions.
- It contributes to inclusive development, regional integration, and foreign exchange stability.
Strategic Importance
- Tourism strengthens India’s soft power by promoting cultural heritage and wellness.
- It aids in positioning India as a global tourism hub, aligned with sustainable development.
- Promotes Make in India and Vocal for Local initiatives through handicrafts, cuisine, and wellness products.
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