An Analysis of Percentage Share of Foreign Exchange Earnings from Tourism in Balance of Payments of India

Abstract

Tourism is a rapidly growing industry of the world and it is gaining universal acceptance as an engine because of its forward and backward linkages which helps in overall development of a country. Like any other countries, India is also recognizing the tourism sector’s ability to push the economy upward. India is now able to attract a huge amount of foreign tourists, which is giving rise to the number of foreign tourist arrivals (FTAS) in India, which in turn giving rise to the foreign exchange earnings. According to Ministry of Tourism (Government of India), during 2018, foreign tourist arrivals (FTAs) in India stood at 10.56 million and it is contributing US $ 28585 million as a Foreign Exchange to the economy. This is also providing helping hand to stabilize the Balance of Payments (BoP) of the country. The tourism sector of India is the second largest contributor among the services to the current account balance of the country. India is a net exporter of travel as foreigners visiting India spend more money than Indians visiting foreign countries. As International tourism usually does not require high value imports for every single unit of foreign currency coming into the economies of developing countries, it can be used for the development of the economy of the country. However, this paper is trying to analyze the growth of the tourism sector as well as its percentage share as Foreign Exchange Receipts to the Balance of Payments (BoP) of the country India.