A renewed push for domestic tourism in India has emerged after Prime Minister Narendra Modi urged citizens to avoid non-essential foreign travel for a year, as the country looks to reduce foreign exchange outflows and trim its import bill amid a crisis triggered by the West Asia conflict.
Industry executives believe the appeal could further strengthen demand for local travel, benefiting airlines, hotels, homestays, tour operators, and state tourism boards across India.
The appeal is part of a broader set of austerity measures proposed by the Prime Minister as India grapples with the economic impact of the ongoing West Asia crisis. The shift comes amid rising global inflation and surging energy prices, with crude oil trading above $100 a barrel after Iran’s closure of the Strait of Hormuz disrupted nearly a fifth of global oil and liquefied natural gas supplies.
Read more: Outbound travel slows as Indians rethink foreign holidays amid crisis and costs
Will domestic tourism benefit?
The annual report of the Tourism Ministry showed that in 2025, India recorded foreign tourist arrivals of 9.02 million (provisional), generating foreign exchange earnings of Rs 2,73,638 crore (provisional estimate of 2025). Besides, as per the data furnished by State/UT Governments and other information available with the Tourism Ministry, there were 4,132.8 million(provisional) domestic tourist visits (DTVs) across the country during the year 2025.
“The appeal by Prime Minister Modi to promote domestic travel has a huge positive impact on the travel and hospitality sector. In addition to growing interest in realising just how many undiscovered areas there are in India, such appeals also help enhance the overall tourism infrastructure by creating a positive economic impact on local communities, more jobs and better infrastructure,” Ravi Gosain, President, Indian Association of Tour Operators (IATO), told ET Online.
Also read: Air India terminates flights to multiple destinations as fuel price bites
Outbound boom in recent years
Despite the push for domestic tourism, outbound travel from India has remained strong in recent years, fuelled by rising disposable incomes and an expanding middle class.
According to ACKO India Travel Report 2025, “By 2027, India is projected to become the world's fifth-largest outbound travel market, with spending expected to touch $89 billion. Overseas expenditure hit $31.7 billion in FY24 — a 25% jump from the previous year.”
Japan has become a favoured destination for Indian travellers, recording a 53% increase in visitors since 2019. Vietnam has also captivated Indian tourists, with new direct flights more than tripling passenger traffic to the Southeast Asian country.
“While global headwinds such as rising fuel costs and geopolitical uncertainties are realities we monitor closely, our bookings through May remain strong and are growing year on year. That resilience is a testament to how deeply travel is woven into people's lives today,” said Hari Ganapathy, co-founder, Pickyourtrail.
Ranjan Murthy, Co-Founder, Joy-N-Crew, said, “Prime Minister Narendra Modi’s call to prioritise domestic tourism could gradually accelerate a meaningful shift towards premium domestic travel experiences, shorter getaways, road trips and culturally rooted itineraries within India. The current phase is likely to push the industry towards building stronger domestic tourism products while maintaining balance between aspirational outbound travel and sustainable local tourism growth.”
