India has more tourists than ever. So why is tourism in trouble?

0:00For several years now, India's Prime Minister Narendra Modi has been telling us Indians to see our own country before we see the rest of the world. That was him making a passionate appeal for the same seven years ago during the annual Independence Day address from Red Fort in Delhi when India had turned 72 years old. So, travel within India, spend your holidays here, have your weddings here, rather than in some foreign country. And so far it looks like his appeals are working spectacularly.

1:06Indians are travelling inside India like never before. Domestic trips jumped 46% in a single year to more than 4 billion. It is close to double of what the country recorded before the pandemic. But here's the thing, that was only half his message. The other part, which he also most recently brought up again during his visit to Kyrgyzstan in a social media post was this. The Prime Minister also asked Indians to avoid foreign travel and to keep those rupees at home. And on that count, Indians seem to be politely ignoring the Prime Minister. Foreign holiday travel has held up. Roughly 13 million Indians took a foreign holiday in 2025. And this is close to what they took the year before and well above anything seen before the pandemic.

2:10So, Indians are travelling more at home and they're travelling more abroad. I mean, they're just travelling more. But somewhere underneath all of this, something else is also moving. Foreign tourists have been coming less and less to India. The country counted around 9 million foreign arrivals last year, a number that is also falling down about 8% from the year before. In fact, even that 9 million needs a footnote. In an interview with Bloomberg, the head of India's store operators association estimated that once the medical travelers and the diaspora returning to see their family are set aside, the number of foreigners who came simply to holiday in India may be closer to 3 million. So, on one hand, you have a country that has never been more full of travelers and at the same time, it is also attracting fewer and fewer travelers from other countries. And that raises a question that the arrival figures on their own cannot answer. When India builds a hotel now or restores a temple town or designs of holiday, who is it really

3:16building for? Welcome to Daybreak, a business podcast from the Ken, Amihaos Nidha Sharma and Arun Chisna Nooh's cycle. Instead, every day of the week, my colleague Rachel Varghiz and I will come to you with one business story that's worth understanding and worth your time. Today's Thursday, the 10th of September. When foreign tourists stop coming to a country, there's usually no shortage of explanations and India has many. This year's budget in fact tells a strange story. Turns out, India has almost stopped spending money to sell itself abroad. It's set aside just 3 and a half crore rupees to promote India to foreign travelers, which is down from about 32 grows that it actually

4:18spent two years earlier. This is a cut of nearly 90%. It has also cut, by the way, its domestic tourism promotion budget to nothing. But the government has not stopped spending on tourism. In fact, far from it, it has raised the tourism ministry's total budget to nearly 2500 crore rupees. Of this, nearly 2000 crore rupees is going towards developing tourist circuits and almost 250 crores to pilgrimage and heritage projects. So the money is there, it has simply stopped going towards persuading anybody to come. And it has gone towards building. And then of course, there are other problems as well. Foreign governments often warn their citizens about scams and sexual violence in India, which specific advice for women and solo travelers. Visas are another source of friction. This is not just an industry complaint. In fact, in its June tourism report, Nithiayo gets self-identified restrictive visa access and friction in the application process

5:24as problems. And it proposed moving towards a targeted visa on arrival system. And this year brought a new problem. The America's rail war on Iran disrupted air routes and raised travel costs. India recorded a more than 14% fall in foreign tourist arrival in April. And ICRA says that the conflict contributed to this contraction. So yes, there are plenty of reasons for a foreign tourist to think twice about coming to India. And the government's own numbers suggest that the problem is real. In 2024, India earned about 35 billion dollars from international tourism. Now, that number sounds quite nice until you compare it with countries like Turkey, Thailand and Saudi Arabia, which have earned more despite attracting far fewer people than India has the potential to serve. Nithiayo says that India accounts for less than 1.5% of international tourist arrivals worldwide. And the official foreign tourist number tells the same story. India

6:27recorded close to 11 million foreign tourist arrivals in 2019 before the pandemic. And then it got back to nearly 10 million in 2024 and then fell to just over 9 million in 2025. This is an 8% decline in a single year and 16% below the pre-pandemic peak. Now, you may argue that a big chunk of this was because of COVID. But international tourism globally had recovered to around pre-pandemic levels already by 2024. So we cannot say the same for India. The obvious conclusion then is that India has a tourist problem. But there is something odd about that conclusion. Because why foreign travelers are proving difficult to attract Indians like I told you earlier are traveling around in the country in numbers that we have never seen before. Domestic tourist visits nearly reach 4.5 billion in 2025. And that is about 85% above the 2019 pre-pandemic level.

7:31Hotels are full prices are rising. I am sure you are noticing in too when you make your own travel plans. So basically there are two stories that are playing out at the same time. The country is getting better at attracting its own citizens to travel within. But it is also getting worse at getting foreigners to come here. Now the first part is what you would expect anyway from a country whose incomes in general are rising. But the second part is harder to explain. The familiar problems marketing, visa, safety, airfare, tells us why a foreign tourist might choose somewhere else. But it still does not tell us how India's tourism economy is still expanding so rapidly without that foreign tourist. And that suggests that maybe this isn't simply a competition in which India is losing customers to Thailand or to Vietnam. Maybe the more important change is who the customer is. Because when most of your tourists are no longer coming from abroad, the tourism

8:35industry itself starts building around the people who are already there. And once the customer changes, the product usually follows. More on this in the next segment. Stay tuned. You know, you can actually see what this exactly means in Goa. Between January and July this year, Goa received about 60 lakh domestic tourists and about 2 and a half lakh international travelers. That is roughly 25 domestic tourists for every one, four in one. At this ratio, the domestic traveler has become the one that matters to the market the most. Hotels can fill rooms with Indians traveling for holidays, weddings, work, restaurants, tour operators and attractions, have a dependable familiar pool of customers to sell to. And the government too is going after the same crowd. Now, to understand this better, you have to widen the lens because it goes beyond

9:38take religious tourism for example. It has become one of the biggest drivers of Indian travel and the government has been building for it. In fact, there is a dedicated scheme which was launched way back in 2014 to 2015 called Prasad. It stands for pilgrimage, rejuvenation and spiritual heritage augmentation drive. Prasad, by the way, if you don't know means the blessed offering handed to worshippers at a temple. And that kind of tells you who this is for. Under Prasad, the centre fully funds states to build the infrastructure around pilgrimage sites, roads, sanitation, parking, walkways. So far, it has sanctioned about 54 projects worth roughly 1700 crore rupees. Take Varanasi. In 2021, the government opened the Kashi Vishwanath corridor, expanding the temple complex from about 3000 square feet to over 5 lakh. Since then, more than 325 million people have visited. And here is a detail that tells you who it is for. A state survey found that domestic visitors to Varanasi spent around 7 to 8000 rupees a trip. Foreign visitors on the other

10:44hand spent about 20,000. But India is now building for the smaller spender because the smaller spender arrives in 10s of millions. Or even Ayodhya is a good example. The round temple opened in January 2024. That year, the city drew more than 160 million visitors, which was up from 6 million only in 2020. It now pulls a bigger crowd than the Taj Mahal itself. And only a fraction of this number is foreign travelers. And this is what the arrival numbers were hiding. You can see the scale of the demand in these places where governments have invested heavily in roads, public spaces and transport. The private sector too is following the same demand. One hotelier in fact told TTTG Asia. Instead of investing in international marketing, we are channeling our resources towards the domestic leisure, wedding and MICE segments. This is a pretty revealing sentence because it tells you

11:48how a hotelier looks at the market now. And that brings me back to the Prime Minister's 2019 appeal in the clip that I played for you at the beginning of this episode. He had asked Indians to travel within India, even if the hotels were not as good and the infrastructure needed to improve. Basically, us Indians should compromise to travel within the country. But for how long? And more importantly, what happens to the standoads in that case? Indian travelers are not going to accept everything like this forever. As incomes rise and more Indians travel abroad, which they are, they have more experiences to compare with. But foreign tourists introduce another kind of comparison. They arrive with expectations formed elsewhere and they have chosen India over dozens of other countries. So what they encounter here becomes a part of the story that they take back home. And that in turn puts pressure on the industry here to get the basics right. The hotels, the taxi, the road, the airport, the monument, the service in general. It also matters to the country itself.

12:53And that is where I think the falling foreign tourist numbers deserves a little more attention than it is getting. India has finally built a tourism market of extraordinary scale at home. Nearly four and a half billion domestic tourist visits were recorded last year. And that is a remarkable economic opportunity. But it also changes the incentive structure. If Indian travelers can keep the hotels full, the planes flying and the destinations busy, the industry has less commercial dependence on the person who has flown 5,000 miles to get here. And that person has something that the domestic traveler does not. The option to take their money somewhere else and tell the world what they found here. So the question that I keep coming back to is not whether India should want more domestic tourists at all. Of course it should. But it is weather as India builds the tourism industry increasingly shaped by its own travelers. It keeps enough pressure on itself to meet the

13:56standards of the people coming from outside. Because the foreign tourists bring more than foreign currency. They bring an outside measure of what India feels like to the rest of the world. And that is all for today. Thank you for tuning in. And if you have any feedback or thoughts on this subject, please write to me at snickda at thecane.com. It is the hyphen can.com. And you could also leave a comment on our YouTube channel. With that, thank you and we will catch you again tomorrow. Daybreak is produced from the newsroom of the Ken India's first subscriber focus business news platform. What you are listening to is just a small sample of a subscriber only offerings and a full subscription offers daily, long form feature stories, newsletters and a whole bunch of premium podcasts. To subscribe, head to thecane.com and click on the red subscribe button on the

14:57top of the website. Today's episode was hosted and produced by my colleagues, Nikhtha Sharma and edited by Rajiv Sien.