Tourist Arrivals in India: How Important are Domestic Disorders?

Abstract

The Indian tourism industry has flourished in the past few years, significantly contributing to the nation's gross domestic product, foreign exchange earnings and employment. India, with its rich natural beauty, is unquestionably a destination that should promote tourism. Over the past few years the Indian government has taken various measures to do this, but the tourism potential of the country has still not been maximized. This paper presents an empirical analysis of the determinants of international tourist arrivals in India using annual data from 1966 to 2000. The results show that sociopolitical factors – communalism, terrorism and tensions with Pakistan – constitute serious threats to the tourism industry, limiting the gains that could otherwise have been realized.