India’s sustainable-tourism industry to grow to $152 million by 2032: Report

New Delhi: India’s sustainable-tourism market was valued at $26.01 million in 2022 and is expected to rise to $151.88 million by 2032 at a compound annual growth rate (CAGR) of 19.3%, according to a report by The Federation of Hotel and Restaurant Associations of India (FHRAI), KPMG and the PHD Chamber of Commerce and Industry (PHDCCI). This growing market also has the potential to boost the services sector and ensure long-term development, the report added.

India’s travel industry faces pressure to become more environmentally friendly owing to growing concerns about climate change, and the country needs to decouple its overall economic growth from greenhouse gas emissions. That’s because despite having a low per-capita consumption rate compared to developed nations, India is projected to become the third-largest emitter of greenhouse gases in the coming years.

An increase in travel and tourism has meant that the country's per-capita emissions are rising as well, the report said. Titled 'Sustainability in Tourism', it added that India’s tourism and hospitality industry is expected to generate revenue of over $59 billion by 2028, but as the sector contributes significantly to the country's carbon footprint, it must adopt responsible tourism practices at the earliest. This will likely enhance India’s value as a tourism destination while minimising environmental impact, it said.

Hotels and resorts are increasingly harnessing solar, wind and geothermal energy to significantly reduce their carbon footprint. FHRAI expects such sustainable business practices to permeate down to not just large hotel chains but also small, individual hotels.

Eco-tourism, a key segment, is expected to grow at 15.7% from 2019 to 2027 to $4.55 billion. While sustainable and experiential tourism has been gaining popularity for some time, the pandemic proved a catalyst for its growth, the report said.

It added that the tourism sector was allocated ₹2,449.62 million in the interim budget for FY25, and the government said it was looking to develop tourism infrastructure, and promote adventure tourism, eco-tourism, business tourism and religious tourism. It also said it would ensure that tourist sites and protected areas were preserved to maximise the sector's potential.

Amitabh Kant, India’s G20 Sherpa and former CEO of NITI Aayog, said, "We add a huge [carbon] footprint as we travel. India will attract 40-45 million tourists in the coming years and we should focus on enhancing the value per tourist rather than [the raw numbers]. By doing this we will be able to attract more companies and greater investment from around the world.”