In order to enhance the country’s inbound tourism sector, industry body FICCI (Federation of Indian Chambers of Commerce and Industry) has suggested a slew of measures. Foreign tourist arrival in 2009 was down by 3.3% to 5.11 million against 5.28 million in 2008 on the back of the Mumbai terror attack in November 2008 which caused a 15% decline in the number of inbound tourists.
It has suggested for a reduction in luxury and service taxes on tourism. These two types of taxes account for 40-45% cost of the average tour package for foreigners. FICCI said, ‘Luxury and service taxes account for about 40–45% of the total cost of the average tour package for foreign tourists. These taxes should be reduced to 15 per cent of the total cost.’
The industry body has also suggested for beefing up security arrangements as they are still susceptible to automatic weapon attacks. It has recommended hiring of third-party security agencies to ensure safety at hotels.
Moreover, FICCI believes that relaxation of entry restrictions in special-permit regions such as the Andaman, Lakshadweep and Northeaster states will attract more foreign tourists.
The Great Indian Travel Bazaar which is regarded as the biggest pan-India travel show is scheduled to start in Jaipur from April 11. It is likely to focus on inbound tourism and business-to-business meetings between foreign tour operators and Indian sellers. FICCI expects that around 230 foreign tour operators from 49 countries and 176 sellers of the Indian tourism product are expected to attend the show.
India’s tourism segment is one of the largest services industries in the country since it contributes significantly to the country’s economic expansion and creation of new job opportunities. In FY09, the tourism sector accounted for 6.23% of GDP and 8.78% of the total employment generated in the country.