Indian tourism industry is the 3rd largest growing foreign exchange

investment sectors in India. It is estimated that tourism in India could

amount to 1800 million dollar by 2020 provided there is proper investment in
infrastructure, tourism products and tourism infrastructure. The travel and
hospitality industry continues to be the sector, which has largely profited
from the fast growing economy of India. This has largely been due to the 3.9
million tourist arrivals in FY06 (15% growth) over the previous period. The
compounded growth in tourist inflow over the ten years (FY96-FY05) has
been 8.2%, while in the last five years; growth stands at 9.1% per annum
and keeps on growing. This increase in the number of tourist arrivals in the
country lifted the countrys standing in the world of tourist destinations. The
country is ranked fourth among the worlds must see countries. The sector
continues to face certain problems.

In terms of growth in international tourism receipts, India has clocked a

CAGR of 12.9 per cent which is higher as compared to 9.5 per cent at AsiaPacific level and 6.1 per cent globally,"
India ranked 97 out of 177 countries in survey of level of corruption, as being
perceived by people. It got score of 36 out 100. According to recent reports it
corruption rates are at its highest. Political parties have been labelled the
most corrupt institution in India. Also Indias decaying infrastructure limit
restrictive road and other transport restricts companys ability to transport.

Although it wont really significantly affect tourism industry as compared to

manufacturing industries. Also the continues inflation of the rupee, which
remains over 8% and also the interest rates in India keep on climbing creates
problem for the foreign investors. Besides that the regional complexities and
laws could also become hard to cope with. But at the moment USA is the
largest investor in India. It has prospects of developing better trading
relations with India and start investing more aggressively.
The current government of India has taken major steps to become more
attractive to the potential foreign investors. They are working on ways to
allow FDI in Limited Liability Partnerships and removing the FDI prohibition in
the multi-brand sectors. The number of foreign in flow of tourists has
increased by 20% in 2010. Being the fastest developing and largest
democratic economy India has huge potential to reap gains from
international trade. With variety of tourisms like medical, Horticulture,
cultural, adventurous and pilgrimage, there is a really wide customer base to
reach out to. With new government policies promoting FDI in India and
reducing barriers it is an excellent opportunity to get first time entrants
gains. Indias easy visa rules, public freedoms and its many attractions as an
ancient civilization makes tourism development easier than in many other
countries