India's tourism sector needs comprehensive investment: Minister Reddy
8 min read 26 Apr 2023, 05:40 PM IST- ‘To develop the sector further, to attract investments of large sizes, the private sector has to be involved…We are expecting foreign investors to take part in this summit’
PremiumAs the spotlight turns on India with the G20 Summit, the Ministry of Tourism is devising strategies to regain investor confidence in the nation's tourism sector. Tourism minister Gangapuram Kishan Reddy, in an interview with Mint, said the country requires trillions in investment to establish a strong tourism-based economy. To achieve this, the ministry is focusing on fostering public-private partnerships (PPP). Edited excerpts:
How much priority is the government according to tourism for this?
India is a big country with a large population. Because of various reasons, for the last so many years, tourism has been a neglected sector. There are so many opportunities in the country when it comes to promotion and branding of destinations, public private partnerships, policy, and publicity. But this hasn’t happened well enough. In a country the size of India, the central government alone cannot manage everything. But across different states in the country, very little has been kept aside for tourism improvement. For instance, if we look at the North East, very little was provided and a lot of that amount would be spent on salaries. The opportunity is much larger than that.
What is the government doing about that?
For this, the Ministry of Tourism has come up with its first Global Tourism Investors Summit which will happen in May. The summit has been conducted to attract private investments in the tourism sector keeping in mind that in order for India to compete with the rest of the world for foreign tourists, or even domestic tourists who can confidently visit our tourist destinations, there has to be a certain amount of infrastructure activity there. We also want different states to compete with each other in order to attract more investments to their states.
Will that benefit these states?
This will help many of these state governments formulate better policies and incentives to attract these private investments. All properties except the India Tourism Development Corporation and the Archaeological Survey of India monuments which sponsor the Swadesh Darshan scheme are owned by different states directly and so the onus lies on these states to plan their budgets and policies around tourism well. In such a time, we have to involve state governments to come up with good policies. We now also have a 100% FDI policy for investment in certain categories.
But why go down the PPP model?
I have said before that neither state governments nor the center can spend enough on tourism. Even if we spend many lakh crores, it won’t be enough to develop tourism since there are many thousands of destinations. If we look at the second quarter of FY 22-23, inbound tourism has increased tremendously. To develop the sector further, to attract investments of large sizes, the private sector has to be involved. We want to create an investment atmosphere. We are expecting foreign investors to take part in this summit. Hospitality associations or other bodies like The Confederation of Indian Industry (CII) will also help reach out to their international counterparts to bring in investors.
In the recent months, many international hotel chains have shown a strong commitment to developing their Indian portfolios. Is the interest in India as a destination to do business growing?
Not only hotel firms, but state governments have also shown their commitment to developing tourism infrastructure. These governments are ready to give land and provide incentives to develop these businesses. Wherever there is a big hotel, there is also an immediate increase in tourism. Right now, there is a major demand for hotel rooms in India. A lot of these companies had a hard time during covid, but they have made up for their losses now and we were seeing high occupancies in most tourist destinations.
For instance, we recently also spoke to a hotel association in Bengaluru and have signed MoUs with a lot of international hotel companies to identify and discuss how many hotels they could potentially open there before the summit begins.
The budget for overseas promotion activities like Incredible India has been cut by more than half in this year’s budget to ₹167 crore from ₹525 crore two years ago. But at the same time, you have a target to bring in 25 million tourists by 2030. How will this vision be achieved?
Yes, that is because of covid. In the last two years, no country was doing any overseas promotions. In fact, even till date, the center and state governments have been issuing guidelines for the covid. We now have plans to develop these promotions. After the cabinet approves it, we will also resume these activities. If we had spent on overseas promotions in the last two years, it would have been a waste since tourists were unwilling to travel.
Will you be running the new campaigns digitally only or will you also be using television as a medium in the identified overseas destinations like you did before 2015?
We will do it all. This is the first time we have involved various embassies and tourism offices of the top 20 countries that send tourists to India in helping develop our overseas promotion programme. They have just begun this work. For this, we are also in touch with tourism officers in these embassies to identify local media and social media influencers etc., to promote tourism in India by marketing them to the Indian diaspora.
But recently the government shut down seven tourism offices in the world. What was the reason to shut down these offices in big cities, including in London, Tokyo, Beijing, Dubai, Singapore, and New York?
Yes, instead of having a small tourism office with one officer sitting in these countries, we have involved the entire embassy in the same work. This will be more beneficial to us. The idea was to have a holistic approach on part of the government to developing tourism which includes using the officers of the Ministry of External Affairs, UNESCO, etc.., For instance, even during the G20, while the MoT isn’t directly involved in the planning of many meetings, it draws the benefits. There are going to be 250 meetings. The handoff to the Ministry of Tourism will happen as soon as each of these meetings is conducted.
How much will be spent on the G20 from the ₹2400 crore allocated to the Ministry of Tourism this year?
We will spend what is needed and there will be nothing lacking from our end. The government will spend what is required on branding the country and could even spend more if needed. For instance, under the Swadesh Darshan tourism we have identified 50 destinations to develop. We have also spent the allocated amount on the Pilgrimage Rejuvenation And Spiritual Augmentation Drive or Prasad scheme.
These 50 new destinations were said to be developed. Have they been identified?
The prime responsibility of that lies with the state governments. We give guidelines and funds to these state governments but the identification has to be done from their end.
You also envisaged making 59 new air routes and helipads etc., operational to boost tourism in the country. Could you talk about the progress in that?
We have made helipads in the past in locations like Goa and the state governments whenever they have asked us, we have provided them with the funds. We do also spend through the Udaan Scheme through the Ministry of Civil Aviation and the railways ministry and other port development boards. We also make states spend on these as well as allocate central funds wherever needed.
The government announced that it would have $1 trillion in tourist inflows by 2047. What is the figure right now?
It was the Prime Minister’s vision for India @ 100 where we would have a target for the size of the tourism economy by 2047. It’s at $150 billion now and the goal is to reach $1 trillion.
How many tourist arrivals are you estimating by that year?
About 100 million.
How will you achieve this number?
G20 will add to that. We will now launch our international publicity campaign. This year, there will also be more travel marts that will happen. There will also be a Meetings, Incentives, Conferences & Exhibitions event that will happen this year which will help us showcase the country. We will now shift to a different structure to appoint agencies in different international markets to develop these things. Of course, we will strengthen domestic tourism which has grown much beyond our expectations, especially spiritual tourism.
This government has a big focus on domestic tourism. In fact, more than 50% of the tourism budget this year has been allocated to the Swadesh Darshan scheme. Can you elaborate?
In more than 150 spiritual centers, we have developed amenities for pilgrims. We have pilgrims travelling all over the country across various religions, and we are providing all those amenities. The focus has been on Ayodhya, Varanasi, Ujjain. We have seen such a growth in tourism in Varanasi after the temple redevelopment there. We recently also inaugurated the first Global Buddhist Summit. This is the first time we got Buddhists monks from around the world to participate.