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Crisil suggests more targeted, ecosystem-wide approach to extract full potential of tourism
Dec-31-2025

Crisil Intelligence in latest report has emphasized the need of a far more targeted, ecosystem-wide approach in order to convert high visitor volumes into higher incomes and realise full potential of country’s tourism sector. It has suggested that the sector should strengthen micro, small and medium enterprises (MSMEs) capabilities, improve destination infrastructure and service quality. Further, it said the full potential of domestic tourism sector is yet to be realised, despite being a large livelihood engine, due to weak supply-side enabling conditions. It noted that the country has the entrepreneurial base and domestic demand and will benefit from cultural richness and natural diversity to emerge as a global tourism powerhouse.

It highlighted that while the tourism was the country's largest non-farm employer engaging more than 13% of the workforce and recording 2.96 billion tourist visits in 2024, it lacked to translate to economic value addition. It noted that the sector accounted for only about 5% of the gross domestic product, which is well below the global average of 10%, indicating a persistent gap between visitor arrivals and value creation. Crisil pointed that India hosts only 1.4% of total international tourists, far below its potential, and nearly one-third of these visitors are the Indian diaspora, travelling primarily to meet family and friends, rather than for leisure. In order to unlock higher-value tourism, it suggested that India must expand its appeal to high-spending leisure travellers from high-income countries. It also emphasised the need of retaining the domestic travellers, who currently spend heavily abroad, as Indian outbound travel expenditure has risen sharply to $17 billion in fiscal 2024.

In order to realise the domestic tourism sector's full potential, it recommended targeted interventions including building circuit-based infrastructure upgrades through PPPs (public-private-partnerships); development of flagship, world-class destination hubs; improved safety, hygiene and mobility through better planning and regulation; and sustainability-led destination management to protect fragile circuits. It also suggested deep integration of MSMEs, self-help groups (SHGs), artisans, home-stays and youth; skill development for hospitality, guiding, digital marketing, food safety and eco-operations; stronger branding and digital marketing to reposition India globally; along with targeted financing support, credit access and formalisation pathways for tourism MSMEs.
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