India’s tourism industry is on the fast track, with estimates showing it could exceed 59 billion USD (around INR 5,12,356 crore) by 2028. While foreign visitors, expected to reach 30.5 million, certainly count, it’s actually the home crowd that’s fueling the rocket. Domestic travel is skyrocketing with the number of trips likely to double by 2030. Improved transport networks, rising incomes, and a growing appetite for luxury and cultural adventures are the big engines of this surge.

A new report from Capitalmind PMS, built on data from the Ministry of Tourism, reveals the industry is cruising along nicely. In 2024, Indians are set to make 2.5 billion trips, and that number should hit 5.2 billion by 2030, growing at a healthy 13.4 percent a year.

Domestic Tourism Growth Fuels the Indian Travel Boom

The surge in domestic tourism plays a crucial role in India’s travel boom. Spending by domestic tourists has seen significant growth, increasing from 152.88 billion USD in 2019 to 175.68 billion USD in 2023. By 2034, this figure is expected to reach 407.4 billion USD, growing at a CAGR of 7.9 percent. The rise in disposable income and improved transport infrastructure, particularly in air, road, and rail connectivity, is driving this rapid increase in domestic tourism.

India’s domestic air traffic is also on the rise. Passenger traffic is projected to more than double, increasing to 693 million by FY30, up from 307 million in FY24. This surge reflects a growing middle class with more access to affordable air travel options.

Foreign Tourist Arrivals (FTAs) on the Rise

Alongside domestic tourism, foreign tourist arrivals in India are also experiencing growth. FTAs reached 18.89 million in 2023, surpassing the previous peak of 17.91 million in 2019 by 5.47 percent. India’s diverse offerings, spanning from historical and cultural sites to luxurious wellness retreats, are drawing more international visitors. The country is increasingly becoming a top choice for travelers seeking both affordable luxury and immersive cultural experiences.

The report highlights that India is now seen as a desirable alternative to Europe, especially for wellness tourism. Ayurveda resorts, yoga spas, and palace stays have become especially popular among foreign tourists seeking luxury wellness retreats. As these options gain international recognition, India’s appeal as a luxury destination grows.

Regional Growth: Uttar Pradesh and Tamil Nadu Lead Domestic Tourism

The report also notes that Uttar Pradesh and Tamil Nadu are leading the charge in domestic tourism, with Uttar Pradesh alone recording 478.53 million visits in 2023. Tamil Nadu follows closely with 286.01 million visits. These states offer a variety of cultural experiences, historical sites, and natural beauty, making them top domestic travel destinations.

In terms of foreign arrivals, Maharashtra and Gujarat are the top states, with Maharashtra receiving 3.39 million visitors and Gujarat 2.81 million. These states are known for their vibrant culture, historical landmarks, and growing infrastructure, making them attractive to international travelers.

Travel Boom Driven by Connectivity and Infrastructure Investments

India’s expanding tourism sector is being bolstered by significant investments in infrastructure. Improved connectivity, whether by air, rail, or road, is making travel across the country easier and more accessible. In addition to the rise in air traffic, India is investing heavily in improving rail and road infrastructure to support its growing tourism industry.

The rise in domestic tourism is particularly driven by middle-class growth, as more people have the financial means to explore their own country. The expansion of budget airlines and the improvement of infrastructure in lesser-known destinations are making travel more affordable and convenient for a wider range of travelers.

Luxury and Cultural Tourism: Key Drivers of Foreign Arrivals

India’s tourism sector is increasingly driven by luxury and cultural tourism. The growth in foreign visitors is particularly strong from South Asia, North America, and Western Europe, with South Asia accounting for 29.02 percent of FTAs, North America 21.82 percent, and Western Europe 20.40 percent. Leisure travel (46.2 percent), diaspora visits (26.9 percent), and business travel (10.3 percent) are the key drivers of these arrivals.

Luxury travel to India is growing rapidly, as more foreigners opt for Ayurvedic retreats, palace stays, and yoga resorts, which have become highly popular. India’s blend of affordable luxury, wellness, and cultural tourism is being increasingly recognized by international travelers.

Travel Market Set to Reach 125 Billion USD by 2027

India’s total travel market, including both domestic and international tourism, is expected to grow from 75 billion USD in FY20 to 125 billion USD by FY27. This rapid expansion highlights India’s growing position as a global tourism hub. With more travelers visiting India for both luxury and cultural experiences, the tourism sector is set to become one of the leading contributors to the country’s economy.

The Future of Indian Tourism

The future of Indian tourism is shining bright. More and more people are traveling both within the country and from abroad. Smart investments in roads, airports, and railways, along with a booming middle class, are helping the sector grow. At the same time, more tourists are looking for luxurious and wellness-focused trips. Efforts to improve connectivity are making it easier to visit famous spots as well as hidden gems, making India a more appealing choice for travelers across the globe.

By 2028, India is on track to welcome 30.5 million international tourists, and the number of Indians traveling for leisure is also expected to skyrocket. Anyone looking for a deep cultural experience, a pampering wellness retreat, or a one-of-a-kind destination will find exactly what they want in India in the next few years.