Chapter 1

1
1.1 Introduction

You usually purchase an item from a shopkeeper and the shopkeeper purchases that
item from the distributor. Furthermore, this item reaches to the distributor from the
manufacturer. The manufacturer produced this item from the raw materials available to
him. This is how the industry functions.

It is generally a group of organizations that are involved in manufacturing and producing

the part for the same type of services and products. An introduction to industry is
incomplete without mentioning the above process.

Usually, industries are involved in the secondary activity of the manufacturing of the
goods. There are different types of secondary activities that convert the raw materials
into products that give more value to the people.

Here, in this scenario, industry refers to the economic activities that are related to the
production of goods, extraction of services, etc.

Thus, it can also be said that the industry is concerned with the production of goods as in
the case of steel, provision of services in the case of tourism, and extraction of
minerals in the case of coal mining.

1.1.1 Primary industry

This sector of a nation’s economy includes agriculture, forestry, fishing, mining,
quarrying, and the extraction of minerals. It may be divided into two categories: genetic
industry, including the production of raw materials that may be increased by human
intervention in the production process; and extractive industry, including the production
of exhaustible raw materials that cannot be augmented through cultivation.

2
The genetic industries include agriculture, forestry, and livestock management and
fishing—all of which are subject to scientific and technological improvement of
renewable resources. The extractive industries include the mining of mineral ores, the
quarrying of stone, and the extraction of mineral fuels.

Primary industry tends to dominate the economies of undeveloped and developing

nations, but as secondary and tertiary industries are developed, its share of the economic
output tends to decrease.

1.1.2 Secondary industry

This sector, also called manufacturing industry, takes the raw materials supplied by
primary industries and processes them into consumer goods, or further processes goods
that other secondary industries have transformed into products, or builds capital goods
used to manufacture consumer and nonconsumer goods. Secondary industry also
includes energy-producing industries (e.g., hydroelectric industries) as well as the
construction industry.

Secondary industry may be divided into heavy, or large-scale, and light, or small-scale,
industry. Large-scale industry generally requires heavy capital investment in
plants and machinery, serves a large and diverse market including other manufacturing
industries, has a complex industrial organization and frequently a skilled specialized
labour force, and generates a large volume of output. Examples would include petroleum
refining, steel and iron manufacturing (see metalwork), motor vehicle and heavy
machinery manufacture, cement production, nonferrous metal refining, meat-packing,
and hydroelectric power generation.

Light, or small-scale, industry may be characterized by the nondurability of

manufactured products and a smaller capital investment in plants and equipment, and it
may involve nonstandard products, such as customized or craft work. The labour force
may be either low skilled, as in textile work and clothing manufacture, food processing,
and plastics manufacture, or highly skilled, as in electronics and computer hardware

3
manufacture, precision instrument manufacture, gemstone cutting, and craft work.

1.1.3 Tertiary industry

This broad sector, also called the service industry, includes industries that, while
producing no tangible goods, provide services or intangible gains or generate wealth.
This sector generally includes both private and government enterprises.

The industries of this sector include, among others, banking, finance, insurance,
investment, and real estate services; wholesale, retail, and
resale trade; transportation;
professional, consulting, legal,
and personal services; tourism,
hotels, restaurants, and
entertainment; repair and
maintenance services; and health,
social welfare, administrative,
police, security, and defense
services.

1.1.4 Quaternary industry

An extension of tertiary industry that is often recognized as its own sector, quaternary
industry, is concerned with information-based or knowledge-oriented products and
services. Like the tertiary sector, it comprises a mixture of private and government
endeavours. Industries and activities in this sector include information systems and
information technology (IT); research and development, including technological
development and scientific research; financial and strategic analysis and consulting;
media and communications technologies and services; and education, including
teaching and educational technologies and services.

4
1.1 Classification of Industries

Industries are part of the secondary activity. Secondary activities or manufacturing

converts raw materials into products of more value to people. The industry refers to
economic activities concerned with the production of goods, extraction of services, and

provision of services. Industry classification or industry taxonomy is a type of

economic taxonomy that classifies companies, organizations, and traders into
industrial groupings based on similar production processes, similar products, or
similar behavior in financial maIndustries can be classified into several groups. The
5
following table gives an understanding of them.

1.1.1 On the Basis of Strength of Labour

 Large Scale: Industries which employ a large number of labourers in each unit
are called large-scale industries. Cotton or jute textile industries are large scale
industries.

 Medium Scale: The industries which employ neither very large nor very small
number of labourers are put in the category of medium scale industries. Cycle
industry, radio and television industries are some examples of medium scale
industries.

 Small Scale: The Industries which are owned and run by individuals and which
employ a small number of labourers are called small scale industries.

 Cottage industries: Industries which artisans set up in their own houses, work
with wood, cane, brass, stone, etc. are called cottage industries. Handloom.

1.1.2 On the Basis of Source of Raw Material

 Agro based: Agro based industries are those industries which obtain raw-
material from agriculture. Cotton textile, jute textile, sugar and vegetable oil are
representative industries of agro-based group of industries

 Mineral based: The industries that receive raw materials primarily from
minerals such as iron and steel, aluminium and cement industries fall in this
category.

 Pastoral based: These industries depend upon animals for their raw
material. Hides, skins, bones, horns, shoes, dairy, etc. are some of the pastoral-
based industries.
6
  Forest based: Paper card-board, lac, rayon, resin, tanning of leather, leave-
utensils, basket industries are included in this type of industries.

1.1.3 On the basis of Ownership

 Private Sector: Industries owned by individuals or firms such as Bajaj Auto or

TISCO situated at Jamshedpur are called private sector industries.

 Public Sector: Industries owned by the state and its agencies like Bharat Heavy
Electricals Ltd., or Bhilai Steel Plant, or Durgapur Steel Plant are public sector
industries.

 Joint Sector: Industries owned jointly by the private firms and the state or its
agencies such as Gujarat Alkalies Ltd., or Oil India Ltd. fall in the group of joint
sector industries.

 Cooperative Sector: Industries owned and run co-operatively by a group of

people who are generally producers of raw materials of the given industry such
as a sugar mill owned and run by farmers are called co-operative sector
industries.

 Multi-National: A multinational corporation (MNC) has facilities and other

assets in at least one country other than its home country. A multinational
company generally has offices and/or factories in different countries and a
centralized head office where they coordinate global management. These
companies, also known as international, stateless, or transnational corporate
organizations tend to have budgets that exceed those of many small countries.
E.g. TCS, Infosys, etc.

1.1.4 On the Basis of Raw-Material and Finished Goods

 Heavy: Industries that use heavy and bulky raw materials and produce products
of the same category are called heavy industries. The iron and steel industry
presents a good example of heavy industries.
7
  Light: The light industries use light raw materials and produce light finished
products. Electric fans, sewing machines are light industries.

1.1.5 Miscellaneous Industries

 Village industries: Village industries are located in villages and primarily cater
to the needs of the rural people. They usually employ local machinery such as oil
extraction, grain grinding, and agricultural implements.

 Cottage industries: Industries which artisans set up in their own houses, work
with wood, cane, brass, stone, etc. are called cottage industries. Handloom,
khadi, and leatherwork at the artisan’s house fall in this category.

 Consumer-based industries: Consumer industries convert raw materials or

primary products into commodities directly used by the people. Textiles,
bakeries, sugar, etc. are some of the consumer goods industries.

 Ancillary Industries: The industries which manufacture parts and components

to be used by big industries for manufacturing heavy articles like trucks, buses,
railway engines, tractors, etc. are called ancillary industries.

 Basic Industries: Industries on which depend many other industries for their
manufacturing processes are called basic industries. The iron and steel industry
and power-generating industries are included in this category.

 Capital Intensive Industries: Industries requiring huge investments are called

capital- intensive industries. Iron and steel, cement, and aluminum are
outstanding examples of capital-intensive industries.

 Labour Intensive: Industries that require a huge labour force for running them
are called labor-intensive industries. In these industries, labour is more important
than capital. Shoe-making and bidi-manufacturing, etc. are included in these
industries.

1.1.6 Categorisation of Industries on the basis of Pollution Index

8
 The Ministry of Environment, Forest and Climate Change (MoEFCC) has
developed the criteria of categorization of industrial sectors based on the
Pollution Index which is a function of the emissions (air pollutants), effluents
(water pollutants), hazardous wastes generated, and consumption of
resources.

 For this purpose, the references are taken from the Water (Prevention and
Control of Pollution ) Cess (Amendment) Act, 2003, Standards so far
prescribed for various pollutants under Environment (Protection) Act, 1986
and Doon Valley Notification, 1989 issued by MoEFCC. The Pollution Index
(PI) of any industrial sector is a number from 0 to 100 and the increasing
value of PI denotes the increasing degree of pollution load from the industrial
sector. The following are the criteria on the ‘Range of Pollution Index for the
purpose of categorization of industrial sectors.

 Industrial Sectors having Pollution Index score of 60 and above – Red

category

 Industrial Sectors having Pollution Index score of 41 to 59 – Orange category

 Industrial Sectors having Pollution Index score of 21 to 40 – Green category

 Industrial Sectors having Pollution Index score incl.& upto 20 – White

category

 There shall be no necessity of obtaining the Consent to Operate for White

category of industries. An intimation to concerned State Pollution Control
Board (SPCB) / Pollution Control Committee (PCC) shall suffice.

 No Red category of industries shall normally be permitted in the ecologically

fragile area /protected area.

9
1.1.7 Footloose industry

 Footloose industry is a general term for an industry that can be placed and
located at any location without effect from factors of production such as
resources, land, labour, and capital.

 These industries often have spatially fixed costs, which means that the costs of
the products do not change despite where the product is assembled. Diamonds,
computer chips, and mobile manufacturing are some examples of footloose
industries. These are generally non-polluting industries.

 Non-footloose industries generally require raw material availability within a time

limit to make products. The sugar industry, jute industry, and tea industry are
examples of non- footloose industries.

 Footloose industries can also refer to the processing of products that are neither
weight- gaining, nor weight-losing, and face significant transportation costs. An
example of the footloose processing industry is honey. The weight of the raw
honey and wax is the same as the finishing product. So, whether the honey is
processed near the source of the raw materials or at the location of the final
product demand, the transportation costs are the same.

The key characteristics of a footloose industry are:

 These industries require small plant size compared to heavy and small industries.

 These are less dependent on specific raw material, especially weight losing ones.
Most of the raw materials are small and light and can be transported easily.

 It needs skilled workers as the industrial process is advanced and major work
needs high- quality precision.

 Like the inputs, the output is lightweight and can be easily transported to the
markets. Most of the footloose industries produce low volume and high-value

10
 outputs.

 These are environment-friendly industries as the process involved in these

industries have a negligible carbon footprint.

 It prefers location which is peaceful and cost friendly as to attract the human capital.

 Also, location with a good connectivity of roads, railways, telecommunication,

airways etc. are preferred to facilitate quick movement of skilled workers and
high-value outputs.

11
1.2 Industry Lifecycle

The industry life cycle refers to the evolution of an industry or business through four
stages based on the business characteristics commonly displayed in each phase. The four
phases of an industry life cycle are the introduction, growth, maturity, and decline
stages. Industries are born when new products are developed, with significant
uncertainty regarding market size, product specifications, and main competitors.
Consolidation and failure whittle down an established industry as it grows, and the
remaining competitors minimize expenses as growth slows and demand eventually
wanes.
Internet communications technology.

There is no universal definition for the various stages of the industry life cycle, but
commonly, it can be organized
into
introduction,
growth,
maturity,
and decline.
The relative
length of
each phase
can also
vary
substantially
among
industries.
The standard
model
typically
deals with

12
manufacture
d goods,
but today's service economy can function somewhat differently, especially in the realm
of

1.2.1 Introduction Phase

The introduction, or startup, phase involves the development and early marketing of a
new product or service. Innovators often create new businesses to enable the production
and proliferation of the new offering. Information on the products and industry
participants are often limited, so demand tends to be unclear. Consumers of the goods
and services need to learn more about them, while the new providers are still
developing and honing the offering. The industry

tends to be highly fragmented in this stage. Participants tend to be unprofitable because

expenses are incurred to develop and market the offering while revenues are still low.

1.2.2 Growth Phase

Consumers in the new industry have come to understand the value of the new offering,
and demand grows rapidly. A handful of important players usually become apparent,
and they compete to establish a share of the new market. Immediate profits usually are
not a top priority as companies spend on research and development or marketing.
Business processes are improved, and geographical expansion is common. Once the
new product has demonstrated viability, larger companies in adjacent industries tend to
enter the market through acquisitions or internal development.

1.2.3 Maturity Phase

The maturity phase begins with a shakeout period, during which growth slows, focus
shifts toward expense reduction, and consolidation occurs. Some firms achieve
economies of scale, hampering the sustainability of smaller competitors. As maturity is
achieved, barriers to entry become higher, and the competitive landscape becomes more
13
clear. Market share, cash flow, and profitability become the primary goals of the
remaining companies now that growth is relatively less important. Price competition
becomes much more relevant as product differentiation declines with consolidation.

Decline Phase

The decline phase marks the end of an industry's ability to support growth. Obsolescence
and evolving end markets negatively impact demand, leading to declining revenues. This
creates margin pressure, forcing weaker competitors out of the industry. Further
consolidation is common as participants seek synergies and further gains from scale.
Decline often signals the end of viability for the incumbent business model, pushing
industry participants into adjacent markets. The decline phase can be delayed with large-
scale product improvements or repurposing, but these tend to prolong the same process.

14
Chapter 2

15
 2.1 Overview of Industry

Tourism is an important socio-economic activity. It provides enormous scope for economic

development of a particular area. According to Ziffer (1989), “Tourism involves travelling to
relatively undisturbed or uncontaminated natural areas with the specific object of
studying, admiring and enjoying the scenery and its wild plants and animals, as well as any
existing cultural aspects (both past and present) found in these areas.”

In India, temple towns, historical monuments and sea beaches were traditionally sought out
as tourist attractions. But now the fabric of tourism is changing rapidly as nature, heritage,
and recreational destinations are gaining more importance. In this background, eco-tourism
has of late become a top attraction for the tourists.

The importance of tourism to economic development has been recognized widely due to
its contribution to the balance of payments, GDP and employment. In last few years, Indian
tourism industry has been growing at a rapid pace and it has vast potential for generating
employment and earning large amount of foreign exchange.

Tourism activities are considered to be one of the major sources of economic growth. It can
be regarded as a mechanism of generating employment as well as income in both formal and
informal sectors (Khalil, 2007). Travel and tourism is the world’s largest industry and job creator
across national and regional economies (Aliquah, 2010). The speedy growth of tourism
causes an increase of household incomes and government revenues through multiplier
effects, improvements in the balance of payments, and growth of the tourism industry itself.
(Kareishan, 2010).

Travel and tourism has not only become one of the world’s largest industry but also keeps
growing consistently every year (Gupta and Gupta, 2007). The international tourist arrivals
have shown an uninterrupted growth. As per the data, the number of FTAs in January 2018
was 1.06 million, compared to 900,000 in January 2017 and 800,000 in January 2016.

The international tourism receipts have increased from US$ 475.3 million in the year 1990 to
US$ 2311.0 million in the year 2016. Tourism industry is contributing 6.23 percent in the
GDP of the country (WTO, 2010). India was ranked eleventh in the Asia pacific region with
respect to international tourist arrivals and 40th overall in the year 2010 (WTO, 2010). It is
16
expected to be the second largest employer in the world by 2019 (WTTC, 2009). Indian
tourism industry is growing and it has vast potential for generating employment and earning
a large amount of foreign exchange.

Tourism is a major engine of economic growth and an important source of employment &
foreign exchange earnings in many countries including India. It has great capacity to create
large-scale employment of diverse kinds – from the most specialized to the unskilled, and
hence can play a major role in the creation of additional employment opportunities. It can
also play an important role in achieving growth with equity and sustainability.

The ways how the industry works for Economic Development is represented through the
following diagram :

ATTRACTIONS

Figure-1: Tourism as an Economic and Commercial Activity a Flow

Chart

The Ministry of Tourism is the nodal agency for the formulation of national policies and
programmes and for the coordination of activities of various Central Government
Agencies, State Governments/UTs and the Private Sector for the development and
promotion of tourism in the country.

17
 Therefore, we can start with an analysis of definitions and statistics. Subsequently, we
will deal with:

• The growth potential of tourism in India;

• The growth potential of Indian (international) Tourism;

• Role of National Tourism Authority, and

• Role /Support required from World Travel and Tourism Council (WTTC) for
promoting National Tourism.

In 2016, there were 1.235 billion international tourist arrivals worldwide, with a growth

of 4% as compared to 1.186 billion in 20152. The top 10 international tourism

destinations in 2016 were:

Figure-2: Growth potential of Indian Tourism (Source: Ministry of Tourism)

From the above diagram it is clear that with the passage of time the number of
tourist visiting India including domestic tourists is increasing significantly.
Therefore, occupying an extra portion of the chunk attracting the Global Tourists will
lead Indian Economy from developing to developed one in future.
18
2.2 BUSINESS SCENARIO

HISTORY
The business scenario in India has undergone a paradigm shift over the years.
The wide varieties of Indian businesses offer immense opportunities for the upcoming
and the growing sectors, such as Automobiles & Auto Components, Financial
Services, Food Industry, Gems and Jewelry, Healthcare, Information Technology,
Insurance, IT enabled, Services, Media & Entertainment, Oil & Gas, Real Estate, Retail,
Steel, Textiles, Telecommunications, Tourism & Hospitality, etc. With these numerous
sectors at the bay, the scope of doing business in India has grown in magnitude.
Therefore, the Government has had a huge role in the transformation of the
Indian Business scenario. To better the possibilities and take exhaustive advantage of the
business opportunities, the Government already has introduced major changes. These
changes were in terms of macroeconomic reforms, tax reforms, finance reforms and
relaxing of the capital market.
In following lines, we will assess Geographic and Economic Scenario Foreign Tourist
Arrivals (FTAs) in Indian Tourism Industry.

GEOGRAPHIC SCENARIO
Tourism Industry, in particular, is growing very fast. It has vast potential for generating
employment and earning large amount of foreign exchange besides giving a fillip
to the country’s overall economic and social development. By 2030 it will be nearly two
billion people, spending just over $2 trillion, in all corners of the world. As per the
report of UNWTO around two billion people, experiencing new cultures, are sharing
new friends, creating new businesses round the globe and these two billion people
providing jobs and an income for 400 million people globally. By 2030, Travel &
Tourism will be 11% of the world’s economy. Each and every person who travels will
play a part in this story of growth, adventure and experience.
Foreign Tourist Arrivals (FTAs) in India from different Regions of the World:
Foreign Tourist Arrivals (FTAs) in India from different regions of the world from 2014
to

19
2016 clearly show that FTAs in India have been increasing from all regions. The
growth was maximum from Eastern Europe (22.64%) followed by South Asia (12.76%),
Australia (11.79%), Central and South America (11.15%), East Asia (11.12%), West
Asia (8.20%), North America (7.98%), Western Europe (7.94%), south East Asia (6.54%)
and Africa (2.9%).
The Following Figure gives the details of FTAs in India during the last three years from
all the regions:

Table-2: Foreign Tourist Arrivals (FTAs) in India from Different Regions of the
World, 2014-2016

Region/ Number of Percentage Percentag

Country Arrivals Share e
Change
2014 2015 2016 201 201 2016 2015 2016
4 5 / /
14 15
South Asia 16948 194620 21945 22.0 24.2 24.93 14.8 12.9
57 7 55 75
Western Europe 18605 188020 20294 24.2 23.4 23.05 1.1 7.9
80 3 12 32
North America 13874 149493 16141 18.0 18.6 18.33 7.7 8
68 0 78 72
South East Asia 68580 700298 74606 8.93 8.72 8.47 2.1 6.5
5 9
East Asia 54679 555770 61756 7.12 6.92 7.01 1.6 11.1
2 3
West Asia 41367 417616 45184 5.39 5.2 5.13 1 8.2
8 2
Eastern Europe 42227 331051 40600 5.5 4.12 4.61 - 22.6
8 2 21.6
Australia 28629 312101 34890 3.73 3.89 3.96 9 11.8
4 8
Africa 28075 293569 30126 3.66 3.66 3.43 4.6 2.9
4 4
Central & South 6992 70831 78730 0.91 0.88 0.89 1.3 11.2
America 6
Not Classified 3066 24557 14988 0.39 0.32 0.19 - -39
elsewhere 7 19.9

20
 Grand Total 76790 802713 88044 100 100 100 4.5 9.7
99 3 11
The percentage share in FTAs in India during 2016 was the highest in South Asia (24.93%),
followed by Western Europe (23.05%), North America (23.33%), South East Asia (8.47%), East
Asia (7.01%), Eastern Europe (4.61%), Australia (3.96%), Africa (3.42%), and Central & South
America (0.89%).
Foreign Tourist Arrivals (FTAs), Arrivals of Non-Resident Indians (NRIs) and
International Tourist Arrivals (ITAs):
The Foreign Tourist Arrivals (FTAs) in India continued to grow from 5.78 million in 2010 to
8.80 million in 2016. During the year 2016, FTAs in India registered a growth of 9.7% over
that of 2015.
Table-3: Inbound Tourism: Foreign Tourist Arrivals (FTAs), Arrivals of Non-Resident
Indians (NRIs) and International Tourist Arrivals (ITAs) 2000-2017(till June)

Year FTAs Percenta NR Percenta Internatio Percenta

in ge (%) Is ge (%) nal Tourist ge (%)
India change arriva change arrival in change
(in over ls in over India over
Millio previous India previous (in previous
Million)
n) Year (in Year Year
Millio
n)
2010 5.78 11.8
2011 6.31 9.2
2012 6.58 4.3
2013 6.97 5.9
2014 7.68 10.2 5.4 13.11
3
2015 8.03 4.5 5.2 - 13.29 1.4
6 3.15
2016 8.8 9.7 5.7 9.7 14.57 9.7
7
2017(
P)
10.18 15.6
Jan
-
No
v

The figure of FTAs for the year 2017 is more encouraging where the growth rate
estimated is 15.6%, which was 9.7 % in the previous year

21
The figure shows that Female FTAs in most of the year is ranging between 40-50% as
compared to Male FTAs which is between 51-60% over the years.

2.1.1 Seasonality of FTAs in India:

Weather condition of different tourist destinations is one of the important determinations
of tourist arrivals.

Table-5: Lean and Peak Months of FTAs in India from Top 15 Countries during 2016

Sl Nationality Lean Month (% Peak Month (%

No share) Share
1 Bangladesh June (4.0%) December (12.7%)
2 US September (5.1%) December (14.4%)
A
3 UK Novenber (6.8%) December (9.6%)
4 Canada May (4.3%) December (13.3%)
5 Malaysia April (6.3%) December (11.4%)
6 Sri Lanka June (5.6%) August (13.0%)
7 Australia May (4.3%) December (18.9%)
8 Germany June (4.6%) November
(11.6%)
9 China June (5.7%) November
(11.0%)
10 France May (4.7%) February (12.3%)
11 Russia Fed June (1.5%) December (18.7%)
12 Japan June (6.5%) November
(10.5%)
13 Singapore April (6.7%) December (13.3%)
14 Nepal May (6.7%) October (9.9%)
15 Afghanistan June (4.6%) December (11.4%)

The peak and lean months for the arrival of tourists from Top 15 source markets for India
during 2016 are presented in Table-5. For 8 countries, namely, the USA, the UK,
Bangladesh, Canada, Australia, Malaysia, Russia and Singapore December was the peak
month. Peak month for each of these countries accounted for more than 10% of the
FTAs except for the UK and Nepal for which peak month accounted for 9.6% and 9.9%,
respectively.

2.1.2 Age Group-wise distribution of FTAs:

Table-6 gives the percentage distribution of FTAs in India according to their age
group during 2010- 2016. The proportion of FTAs in different age group has not

22
changed much

23
Table-6: FTAs in India according to Age Group 2010-2016

% Distribution by Age-Group (in years)

01- 65 %
Yea Arrival 2014 15-24 25-34 35-44 45-54 55-64 above
r s
201 577569 10 8.3 17.4 21.1 19.9 13.8 9.5
0 2
201 630922 10.5 7.9 16.6 21.2 19.7 13.7 10.5
1 2
201 657774 11 8 16.5 21 19.8 13.9 9.9
2 5
201 696790 9.5 8.7 19.1 21 20 14 7.7
3 1
201 767909 9.2 8.5 18.9 21 20.1 14 0.3
4 9
201 802713 9.4 8.5 19.2 21.2 20 13.8 7.9
5 3
201 880441 9.5 8.5 19.2 21.1 19.9 13.8 8
6 1
In 2016 the highest number of FTAs in India was 33-44 years age group (21.1%)
followed by the age group of 45-54 years (19.9%) and 25-34 years (19.2%). The lowest
number of FTAs during the same period accounted in the age group of 65 and above
(8%).

2.1.3 FTAs in India according to purpose:

As per the report of Ministry of Tourism the details of region-wise FTAs in India during
2016 are given in the following table-7.

Table-7: Distribution of Region-wise FTAs in India according to Purpose 2016

Location Arriv Business Leisur Medi India Othe

als and e cal n rs
Professi Holiday Diaspo
onal and ra
Recreati
on
North
America
Total 16141 10.3 52.3 0.06 33.69 3.65
78
Central &
South
America
Total 7873 16.94 74.57 0.08 6.06 2.35
0

24
 Western
Europe
FTAs in India from Bangladesh were highest (15.68%) during 2016, whereas the USA turned
to second highest position in 2016 from highest in 2015. The share of FTAs from Top 15
countries during the year 2016 was 73.49% as compaired to that of 72.62% in 2015.
According to a recent report by the World Economic Forum (WEF), India has achieved
the 52nd rank among the list of 141 countries worldwide as per the Travel & Tourism
Competitiveness Index (TTCI) 2015. It is also a great achievement that the country has
moved up 13 notches to the 52nd position as compared to 2013. The top 10 countries are
Spain, France, Germany, the US, the UK, Switzerland, Australia, Italy, Japan and Canada
whereas in emerging countries list we have China (17th), Brazil (28th), Russia (45th), South
Africa (48th) and India (52nd).
This shows that though India has moved up in the global list to a great extent, its position is
still not better than its emerging market peers like China, Brazil, Russia and South Africa.
India has still a long way to go.

THE ECONOMIC SCENARIO:

The analysis of World Industry GDP Growth (Sector-wise in percentage) reveals encouraging
figures as far as Travel and Tourism Industry is concerned. The summary of the same is
presented below :

Figure-9: World Industry GDP Growth

Therefore, there is ample scope of revenue generation from the Travel & Tourism (T &
T) Sector from the economic point of view. As one of the world’s largest economic

25
sectors, Travel & Tourism creates jobs, drives exports, and generates prosperity across the
world. The Annual Analysis of the global economic impact of Travel & Tourism shows
that the sector

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accounts for 10.4% of global GDP and 313 million jobs, or 9.9% of total employment in
2017. In following paras, we will discuss the same in detail:

2.1.4 Direct Contribution of Travel & Tourism (T & T) to Global GDP:

On the basis of real time data available from 2012 onwards till date as far as worldwide
growth of GDP, we will find an encouraging able figure which is placed

*E=Estimated; **F=Forecast
Figure-10: Contribution of T & t to GDP (Global)

Real GDP contribution of T & T or Gross Domestic Product (GDP) at constant 2017
prices in the year 2016-17 is likely to attain a level of 91.27 billion USD as against the
Provisional Estimate of GDP for the year 2017-18 of 98.17 billion USD, released by
World Travel and Tourism Council in its Economic Impact Report 2018. As per the
report, there will be a significant growth of GDP at 194.69 Billion USD by 2028 which
is around 300 percent growth as compared to the year 2012.
The Economic Contribution of Travel & Tourism: Real 2017 Prices
The overall growth in GDP during 2017-18 is estimated at 6.5 per cent. With GDP at
current prices in the year 2017-18 is likely to attain a level of Rs. 166.28 lakh crore, as
against Rs.
151.84 lakh crore in 2016-17 showing a growth rate of 9.5 per cent. Direct contribution
of Travel & Tourism to GDP is has steadily increased over the years with a little deviation in
the year 2013 (Table- 9).

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