The Economic Survey 2024-25 tabled in the Parliament January 31, 2025, by union finance minister Nirmala Sitharaman has noted that the contribution of the tourism sector of India to the GDP regained to the pre-pandemic level of 5 percent in FY ‘23. The tourism sector created 7.6 crore jobs in FY ‘23. International tourist arrivals (ITAs) in India have rebounded to pre-pandemic level in 2023. The share of India’s ITAs in World ITAs stood at 1.45 per cent in 2023, the survey says.
The economic survey 2024-25 also makes a special mention of the services sector growth of which tourism and hospitality sectors are part of. In FY ‘25 so far, services propped up GDP growth when manufacturing has been affected by dampening global merchandise trade. The critical role of services exports in strengthening India’s external balance and the increasing ‘servicification’ of the industrial sector adds to its importance to the Indian economy, highlights the Economic Survey 2024-25.
India’s services sector has been the steadiest contributor to the Gross Value Added (GVA) in the economy. Its contribution to the total GVA at current prices has increased from 50.6 percent in FY 2014 to about 55 percent in FY 2025. The growth in the service sector, as measured by YoY change in the real GVA by services, has been above 6 percent in each year in the last decade, except for the Covid-19 pandemic that affected FY ‘21 performance. The average services growth rate before the pre-pandemic year was 8 percent. The average services growth in the post-pandemic year, i.e. FY23 to FY25 has risen to 8.3 percent. The service sector also provides employment to approximately 30 percent of the workforce in the country.
India’s share in global services exports has been steadily rising for the last two decades. This has helped compensate for the impact of oscillation in the share of merchandise exports in global merchandise exports to some extent. India ranks seventh globally, representing a 4.3 percent share in the global services export, the economic survey noted.
Later presenting the highlights of the Economic Survey 2024-25, V Anantha Nageswaran, chief economic advisor to the government, said that all the economic sectors, particularly the services sector, have erased the impact of the global pandemic and has started showing encouraging growth. He said that the economy has grown by 6 percent in the first half of the current fiscal year and the second half is expected to be better than the first. The government expects the growth momentum to continue in FY ‘26 with a growth outlook of 6.3 to 6.8 percent.
He said that it is important for the private sector to raise the game; business as usual will only lead to business stagnation.
Based on the Economic Survey 2024-25, the Federation of Hotel & Restaurant Associations of India (FHRAI) has asked for supportive policies to keep growth momentum in the tourism and hospitality sector sustaining in the country.
“Granting infrastructure status to the hospitality sector is crucial to unlock long-term investments, improving access to low-cost financing and accelerating development. Additionally, rationalising GST and reducing GST rates for hospitality would further strengthen the industry growth,” said Syama Raju, president, FHRAI in a statement.
