The Federation of Associations in Indian Tourism & Hospitality (FAITH) – policy federation of all the national associations representing the complete tourism, travel and hospitality industry of India (ADTOI, ATOAI, FHRAI, HAI, IATO, ICPB, IHHA, ITTA, TAAI and TAFI has released a vision document on February 16th that focuses on how the country can welcome 75 million tourists by the year 2035.
The key highlights of the vision document were shared in a virtual press conference attended by the leadership of the member associations of FAITH. The vision document stresses on the need to make India competitive through lowering of taxes and making key policy changes as offering industry status to the tourism sector.
Nakul Anand, Chairman, FAITH said, “We expect that with required policy changes and focus on various segments like cruise tourism, adventure tourism, Buddhist circuit, rural tourism among others, India can target 75 million inbound tourists besides 7.5 billion domestic tourism visits. This will result in US$ 150 bn of foreign exchange earnings from inbound tourism and US$ 225 bn economic revenue from domestic tourism.”
FAITH’s tourism vision 2035 proposes four strategic pillars to achieve the goals that included shared national tourism approach, value accretive regulations, investment drivers and market excellence.
PP Khanna, President, ADTOI said, “Indian domestic tourism is already the second-highest in the world with almost 2.3 billion domestic tourism visits. On a medium to long term basis, there should be steps taken by Indian states in collaboration with one another and with the central government to double Indian domestic tourism higher than China which is around 4 billion domestic tourism visits in the medium term and then to more than triple it in the long term.”
“The GST on Tour operators should be 1.8% with full set-offs. Currently, it is at 5% that too without setoffs which implies tax on tax and defeats the purpose of GST.”
Tejbir Singh Anand, Vice President, ATOAI said, “We are a blessed country being only one of the 17 megadiverse countries of the world. Each state of India has the potential to become a centre of excellence in natural and adventure tourism.
“Yet, in the $ 750 bn plus world adventure tourism industry which is poised to touch $ 1.5 trillion in the post covid world, India currently has a negligible share. We look forward to working closely with the central and state governments to move towards a vision is to get at a respectable market share of 5-10% in the medium to a long term basis in the world adventure tourism market which is commensurate with our natural assets.”
Garish Oberoi, Ex-President, FHRAI said, “GST rates for hospitality in India are one of the highest in the world. This makes both domestic and inbound tourism in India expensive. The 18% GST category for hotels above room rates of ₹ 7500 must be abolished and merged with the category of 12% GST. Gradually it should be brought down further below 10% with full set-offs in line with global trends.”
Rajiv Mehra, President, IATO said, “We expect inbound tourism to revive from the 2023 season with the demand from both short-haul and long-haul markets. Our vision is to double India’s share of inbound tourism to 2.5% in the medium-term once the pandemic situation improves. Later, we want this share to double to 5% in the long term. This will rightfully put Indian tourism in the global league where it belongs.
“With all key source markets such as North America and West Europe just showing signs of just emerging from the severe grasp of covid we do not see a full resumption to inbound tourism till October 2023 – 24 and that too is conditional upon no further variants. To survive till then, the inbound tour operators need to have an operating cash subsidy to pay salaries and operating costs as had been effectively done in other countries.
“In the new Foreign Trade Policy which is being planned a duty credit similar to earlier SEIS rate should be made effective at 10% for the next 10 years. The inbound tourism which earns foreign exchange needs to be treated at par with merchandise exports and needs to be zero-rated on GST. The GST on tour operators should be 1.8% with full set-offs which is calculated as 18% GST on a 10% margin. Currently at 5% that too without setoffs it effectively comes to 18% on a 38% margin which is penal. This has made Indian travel one of the most expensive globally. The commercial flights need to resume in full to ensure affordable rate travel.”
Randhir Vikram Singh, President, IHHA said, “Our tourism vision for 2035 and beyond in the heritage tourism segment is to target a minimum of 10 million to 30 million heritage foreign tourists. Our ultimate tourism goal is for India’s rank to be number 1 globally in heritage tourism. To enable these targets the following critical actions must be put in place immediately.
“We must between centre and state jointly target three centres of tourism excellence focused around heritage tourism in each state must be set up going up almost 100 in the country. There must be a heritage tourism board which must be set up with a representation of all states and centre governments in coordination with IHHA to synchronise and standardise heritage tourism policies.”
Amaresh Tiwari, Vice Chairman, ICPB said, “Our first objective in the post covid world would be to double our global mice share to 2.5% and then doubling it over medium to long term. In the global international congress associations rankings, our goal will be to take India’s rank to the top 10 in the world from 28 where we were in the pre covid era.
“We need to recognise mice tourism as a distinct business segment and based upon our years of recommendation the government has already created a sub-brand to the main brand Incredible India.
“We must target global congress, conventions and conferences, and social events we need to create global mice bidding fund with a corpus for ₹ 500 crores to enable our entrepreneurs to undertake economic bids for events which have a bid cycle of 2 years plus.
“We need to create city convention bureaus in each of our main cities which will work with ICPB as their hub to carry out a global bidding activity. In the post – Covid era we also need to incentive Indian corporates to undertake domestic mice and to prevent Indian mice events from going abroad. For that, we need to offer a 200% weighted income tax expense benefit to Indian companies which are undertaking mice events in India.”
Sharat Chandra, Treasurer, ITTA said, “We need to become seamless in our tourist transportation procedures as well and so we need to standardise all inter-State Road taxes and make them payable at a single point which will facilitate the ease of doing business. This will also prevent queues for paying tolls taxes at any place in India, whether for NHAI, Private Toll operators or Municipal corporations of any state.
“We need to have one country one GST. It is critical to make available all costs of tourist transport for GST set-offs. These include interstate taxes, tolls and parking charges, taxes on parking – all of which exceed almost 40% of our gross cost of operations which are charged to clients and have cascading effect. GST should not be applicable on forex earnings of tourist transport. It should also be reduced on purchase of buses from 28% to 18% to encourage group tourism.”
Jyoti Mayal, President, TAAI said, “A key requirement is to make Indian travel agents globally competitive. We along with the government have to ensure that TCS on outbound travel is not levied. Opening up scheduled commercial flights and moving towards creating a fully functional regional aviation hub will fast track Indian travel industry.
“We have tried to survive over this pandemic and now we must begin to revive and continue to build trust and confidence to deal with the challenges today in the post covid era as we move towards our vision.”
Ajay Prakash, President, TAFI said, “The applicability of TCS puts our travel agents business models under threat as they make us expensive to book by 5-10%. Even though the advance tax is settled at the end of the year, it puts a liquidity concern by blocking money and also raises the issue of reconciliation.
“Today our travel agents are under huge business stress and we keenly look forward to a mechanism to ensure they get support for survival till full travel resumes both between source and destination countries. The two-way commercial flights need to resume in full to ensure affordable rate travel for passengers inbound and outbound.”