With a growing economy, young population and growing middle class, India could become one of the most lucrative outbound tourism markets in the world.
Leading up to the Covid-19 pandemic, India was one of the most important and sought-after tourism source markets globally. The country was a key target for major players such as VisitBritain and Tourism Australia to drive visitation from India. However, the Covid crisis has put considerable strain on India’s economy and tourism industry, despite this strain, the outlook looks buoyant, and India will once again become a sought-after source market.
Economic growth will drive outbound tourism
India’s economy will continue to build on its success after an initial lull in 2020. Current projections show the national GDP of India will reach $4 trillion, 50% higher than 2021 levels according to GlobalData’s Macroeconomic database. The growth within India’s economy will directly contribute to a boost in the middle-class population, resulting in increased wealth and disposable income. It poses an excellent opportunity for destination marketers who can capitalize on its young population comprising of Gen Z and millennials who have a propensity to travel abroad. Furthermore, its improving infrastructure and developing low-cost airline market means outbound travel is both affordable and accessible. According to a GlobalData Q3 2021 Global Consumer survey, 56% of Indian respondents said that accessibility and affordability were the main motivation to go on holiday, highlighting the impact of improved transportation links and low-cost airlines
The Covid crisis is a significant setback for tourism development, outbound trips from India fell from 27 million in 2019 to just 7 million in 2020, according to GlobalData. Tourism development typically thrives in developing economies, and India’s future looks bright, providing it can avoid further Covid-19 outbreaks and lockdowns. Before the pandemic, India’s economic growth played a significant factor in its substantial outbound tourism growth. From 2009 and 2019 tourism increased by 143% from 11 million travellers to 27 million. In a post-pandemic era, there is no reason why India cannot build on these figures, with projections showing a full recovery in 2024 and record numbers in 2025 for outbound travellers reaching 28.5 million.
India will still have its challenges
As a developing nation, India will continue to have its challenges. While the projected economic growth is encouraging, there are still significant disparities in its distribution of wealth and many residents still live under the poverty line. However, the outbound travel trends before the pandemic cannot be ignored, as thriving economies typically result in fast-growing outbound tourism. With projections showing that outbound trips from India will reach record levels by 2025 to a high of 28.5 million, considerable growth is likely as the country becomes wealthier and improves education and infrastructure development.