India's outbound tourist spending to reach $18.82 billion this year, with emergence of new destinations: FICCI-Nangia

Indian tourists heading overseas are projected to spend $18.82 billion in 2024, according to a new report, as travel levels return to pre-pandemic levels and new hotspots emerge.

About 28.2 million people departed the country last year, crossing the figure of almost 27 million in 2019. That year, Indians spent $28 billion on travelling abroad, according to a FICCI-Nangia knowledge paper titled ‘Navigating Horizons: The Rise and Future of Indian Outbound Tourism,’ which cited government data.

Outward foreign exchange remittances are expected to jump to $1.42 billion – or about ₹12,500 crore – per month on average in 2023-24, compared to $400 million in 2018-19.

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However, the projection of spending by Indians travelling abroad has shrunk from a rosier estimate of $42 billion in its report two years ago. A spokesperson of Nangia-Andersen said in 2022, the estimates were far more buoyant as the world was still coming out of the pandemic. Since then, geo-political factors have impacted outward travel trends.

Spending by Indian travellers overseas is now expected to increase at a compounded annual growth rate of 11.4% to about $55 billion by 2034.

India's outbound departures are expected to almost triple to 50 million by FY30. Improved connectivity, with more direct and affordable flights, and the desire for international travel are driving this growth. Egypt, Azerbaijan, and Georgia, as well as Southeast Asian nations Indonesia and Malaysia, have become popular destinations due to relaxed visa norms.

Disposable incomes

Currently, 50 countries offer visa-on-arrival and e-visa facilities to Indians, and 27 countries, including Kenya, Tanzania, Myanmar, Thailand, Saint Lucia, Vietnam, Sri Lanka, Cambodia, and Tajikistan, allow visa-free entry.

The number of Indians traveling abroad is expected to continue increasing, fuelled by rising disposable incomes and an expanding middle class.

More than 30% of Indian travellers are opting for Middle Eastern destinations, with Dubai being a key market. This is not surprising, considering that a majority, or 70% of Indian travellers, prefer destinations with a travel time of under four hours and a significant Indian diaspora. These places are followed closely by South Asian destinations.

Travellers are willing to spend up to $7,000 on international trips, significantly impacting the economies of the destinations they visit. 

Travel to the US from India has surged by 59% from the level in 2019, bucking the trend of overall overseas arrivals in the US, which are still 7% below pre-pandemic levels.

Japan has become a favoured destination for Indian travellers – there was a 53% increase in visitors since 2019. Vietnam has captivated Indian tourists, with new direct flights more than tripling passenger traffic to the Southeast Asian country.

In 2023, global outbound travel grew in double digits from the previous year, approaching 2019 travel volumes. The highest increase in international tourists was during the third quarter of 2023, highlighting a strong summer season in the northern hemisphere.

From January to September, tourism reached 87% of pre-pandemic levels, with the sector expected to reach almost 90% by the end of the year, according to UN Tourism. International tourism receipts touched $1.4 trillion in 2023, or 93% of the $1.5 trillion earned in 2019.