Co-piloting aviation and tourism as growth engines for India

As India sets its sights on becoming one of the top global economies with tourism contributing USD 4 trillion by 2047, the convergence of aviation and tourism sectors is emerging not merely as an opportunity—but as a national imperative. With over 90% of international arrivals by air, and domestic aviation on a record-breaking trajectory, the sector has become the oxygen line for tourism-led economic transformation.

But while India’s skies are expanding with infrastructure, ambition, and investment, its tourism numbers still trail behind smaller nations with far fewer assets. The disconnect between connectivity and conversion reveals a deeper challenge—and a greater potential. This report brings together expert insights on what must be done: aligning aviation and tourism policies, opening skies more decisively, amplifying destination marketing, right funding and creating holistic tourism ecosystems. Most critically, it underscores the need for cohesive, cross-ministerial coordination—because without unified action, India risks flying with clipped wings.

As India accelerates towards becoming one of the top global economies by 2047—its 100th year of independence—it must tap into sectors that are not just economically powerful but socially transformative. Two such sectors—aviation and tourism—are proving to be twin engines of national growth, interwoven and collectively capable of reshaping India’s development narrative. India’s aviation resurgence, according to International Air Transport Association, is being powered by a bold remake of its airline sector and massive infrastructure upgrades. Air India’s revival under new ownership is sharpening its focus on service, fleet, and product innovation. IndiGo, meanwhile, has solidified its dominance with a strong pan-India and regional presence, backed by world-leading market capitalisation. Complementing this is a robust multimodal push—expressways, high-speed rail, and a wave of new airports and routes under the UDAN scheme are laying the groundwork for seamless travel. The next big challenge? Turning this connectivity into impactful mobility that fuels tourism, local economies, and job creation.

The neighbours are indeed doing a great job—Thailand attracts 35 million tourists annually, while Malaysia welcomes around 25 million visitors. Singapore—a city with a population less than Delhi’s, but one of the highest per capita incomes sees more than 17 million tourists annually. In stark contrast, India, which has 73% of the Himalayan range, 30+ UNESCO World Heritage Sites 7,500 kilometers of coastline, struggles to cross even the 10-million mark. This disparity raises a critical question: why are we lagging? What’s needed to open our skies and redefine India’s role as a global tourism powerhouse, especially by 2047 when the country’s tourism economy aims to touch a whooping 4 trillion-dollar figure? And also, as the Indian capital preps for the much-awaited IATA AGM in June this year, bringing opportunities to the doorstep.

Aviation + Tourism: a strategic synergy, not a coincidence

With over 90% of international tourists arriving by air now exceeding 150 million passengers annually, the symbiotic relationship between aviation and tourism is clearer than ever. Tourism thrives when destinations are accessible. Aviation thrives when there is strong passenger demand. Together, they form a virtuous cycle of demand and supply, scale and access, infrastructure and aspiration.

“Tourism is fundamentally about access—without connectivity, there is no destination,” said Suman Billa IAS, DG & Additional Secretary of Tourism, Govt of India. “Aviation, in this context, becomes the crucial enabler, offering speed and scale. Over 90% of international visitors to India arrive by air, underscoring the indispensable role of aviation. Domestically, the aviation sector is experiencing an unprecedented boom, supported by a decade of robust infrastructure development. India now boasts world-class highways and an upgraded railway network, including the introduction of Vande Bharat trains that have made travel faster and more comfortable. These improvements are unlocking new tourism corridors and enhancing intra-country mobility. It is also helping make the Indian economy more inclusive and resilient by extending tourism and economic benefits to newer regions.”

Tourism, he quoted, currently contributes 5.04% to India’s GDP. For a country of our size and cultural wealth, this is significantly below potential. Globally, the average is closer to 10%. Recognising this, the Prime Minister has laid down an ambitious vision: to double the tourism sector’s contribution to GDP over the next decade—from 5% to 10%. Achieving this goal hinges on connectivity, asserted Billa. “Fortunately, we are at a pivotal moment—India is ready for take-off with road, rail, and air infrastructure in place. What remains is to integrate these systems for maximum impact.”

Citing figures from the World Travel & Tourism Council (WTTC), Kamal Hingorani, Chief Customer Officer at SpiceJet Ltd, noted that aviation and tourism together accounted for nearly 9% of India’s GDP and 8% of total employment, including both formal and informal sectors. “If aviation and tourism are seen as a single vertical, they probably generate more jobs than any other industry,” he said, urging policymakers to give greater strategic focus to the sector.

With the government aiming to connect 200 airports—including 120 more under development, he stressed that air connectivity is the bedrock of tourism-driven economic upliftment in both urban and remote regions. He pointed out that while states like Maharashtra have strong aviation infrastructure, their tourism numbers pale in comparison to countries like Vietnam with similar population and GDP levels. “Take Maharashtra—it has a population close to 80 million, similar to Vietnam, an emerging economy with a comparable GDP of half a trillion dollars. Yet, Vietnam attracts 18–20 million tourists annually—five times more than Maharashtra, even though Maharashtra houses India’s second busiest airport.”

“We absolutely need greater connectivity—not just from state capitals but from smaller towns as well, to both domestic and international destinations,” he added. On the role of private carrier SpiceJet, he mentioned that it continues to drive connectivity despite past setbacks like COVID-19 and Boeing MAX delays. “The airline currently operates the largest network under the UDAN scheme and is preparing to launch land and seaplane services to enhance last-mile connectivity in destinations such as the Andamans, Kerala, and hill regions—boosting tourism in previously unreachable locations,” Hingorani added, saying that with these plans, SpiceJet aims to create not just connectivity, but meaningful tourism growth.

Also voicing strong support for aviation-driven tourism growth, Ashwani Lohani, Former Chairman of the Railway Board and ex-CMD of Air India and ITDC, cited improved air connectivity as a catalyst for long-term benefits across the travel ecosystem.

“Air connectivity to places that have a major tourist attraction attached, always gives positive results in the long run by benefiting all stakeholders,” said Lohani, praising the Ministry of Civil Aviation’s push to commission new airports and expand the UDAN scheme. He also noted that the privatisation of airports has significantly enhanced passenger services, further encouraging tourism and domestic travel. India’s rapidly modernising and expanding aviation sector too is a huge, good news story for the country, according to Willie Walsh, IATA’s Director General. The aviation industry in India employs 369,700 people directly and generates USD 5.6 billion of economic output. “When you include the additional benefits that aviation brings, such as tourism, the number rises to 7.7 million jobs in India and USD 53.6 billion in economic contribution. That is 1.5% of India’s GDP!” said Walsh.

In a statement accessed by T3, he highlighted that India—propelled by record-breaking aircraft orders, robust growth, and cutting-edge infrastructure—has swiftly ascended to become the world’s fourth-largest aviation market, both domestically and internationally. And if projections by IATA hold true, India will become the third-largest within this decade.

Further, calling the IATA AGM in June in Delhi as the bulls-eye opportunity, Walsh describes the event as a key recognition for the country. “It is an opportunity for India to cement its rise in global aviation by continuing to put in a policy and economic environment that will realize, and most likely exceed, the potential that we all see for aviation in India,” he added, saying the potential that everybody could see for decades is finally being realised.

With tourism and civil aviation increasingly intertwined, the Government of India is also leveraging its growing aviation infrastructure to boost domestic and international travel. Speaking on the symbiotic relationship between the two sectors, The Former Secretary of Civil Aviation, Vumlunmang Vualnam highlighted key developments that are set to transform tourism access across the country. One of the most impactful reforms in recent years he acknowledged was the introduction of the e-visa system—a multi-ministerial initiative involving the Ministries of Home Affairs, External Affairs, and Tourism.

Adding how India’s aviation landscape has undergone a dramatic transformation and has spurred regional tourism, the secretary shared, “Over the past decade, we’ve doubled the number of airports, aircraft, and air passengers, showcasing the private sector’s growing confidence in Indian aviation. Simultaneously, the UDAN scheme (Ude Desh ka Aam Nagrik) has significantly expanded regional air access, particularly to Tier-2 and Tier-3 cities with strong tourism potential. So far, UDAN has connected 88 underserved airports and facilitated air travel for 1.5 crore passengers. Under the revamped scheme announced in the Union Budget, we now aim to connect 120 new destinations and serve an additional 4 crore passengers in the next decade—many of whom will be tourists.”

A new frontier the ministry is now exploring is seaplane connectivity. Following the easing of earlier regulatory restrictions, successful demonstration flights have been carried out in states including Kerala, Andhra Pradesh, Meghalaya, Assam, and union territories such as Lakshadweep and the Andaman & Nicobar Islands. “

These 19-seater amphibian aircraft require minimal infrastructure— just a 3-meter water depth and a basic jetty,” the official explained, citing the Maldives as a successful example of how seaplanes can transform tourism connectivity. Efforts are already underway to align with tour operators and hotels to ensure occupancy and operational viability, especially in destinations like Kerala and Lakshadweep.

Vualnam also pointed to the underexploited potential of India’s Buddhist Circuit, which includes spiritually significant sites such as Varanasi, Sarnath, Gaya, Nalanda, Kushinagar, and Lumbini. “Despite their importance, these sites have not received the kind of structured promotion and end-to-end travel packages that international Buddhist pilgrims expect,” he said, noting that only through joint effort can we elevate this high-potential circuit to global prominence.

Opportunities & Challenges:

In a bold counterpoint to the optimism expressed by Billa who was speaking at a recent tourism and aviation forum, industry veteran, Dr Subhash Goyal, Chairman, STIC Group, delivered a reality check that resonated with urgency and conviction in well-aligning both the sectors. “Tourism can indeed be a pillar of India’s multi-trillion-dollar economy,” he said, “but only if we face the facts and make bold structural reforms.”

Goyal was unsparing in his assessment saying India received 11.5 million foreign tourists in 2019. Today, that number still lingers around 9 million. “Let’s be clear. This is about inbound tourism, not domestic travel. Domestic tourism circulates money within the country. It doesn’t bring in foreign exchange or create the kinds of jobs international tourism does.”

Citing skyrocketing airfares and a restrictive bilateral aviation policy, Goyal called India’s air connectivity “the biggest bottleneck” in tourism growth. “Reciprocity for the sake of reciprocity is foolishness,” he said. “We must act in national interest.”

He pointed to Dubai and Qatar as success stories—countries with minimal natural resources that embraced open skies, aggressively liberalised their policies, and today stand tall as global tourism hubs. “Even a place like Saudi Arabia, once very conservative, has launched Riyadh Air and is investing billions into tourism. What’s stopping us?”

He also criticised the underutilisation of infrastructure. “Bhopal has a brand-new international terminal. Ayodhya is a religious magnet—but where are the international flights? We need to open the skies. Delhi and Mumbai airports are saturated—airlines can’t even get slots,” he questioned, urging other states to demand connectivity.

India’s tourism industry is also shackled by high room tariffs and heavy taxes, said Goyal. “INR26,000 to INR50,000 a night for a hotel? In Vietnam, you get luxury at $100. We propose a uniform GST rate for tourism not exceeding 5%. Anything more kills competitiveness,” he suggested.

He also highlighted the irony of India’s dwindling international marketing efforts post-COVID. “While others scaled up, we shut down our overseas offices. If we can’t run them, at least appoint international marketing reps, like Thailand, Sri Lanka, and even Dubai. Tourism is a powerful instrument for job creation and poverty alleviation. And in India, where unemployment is a ticking time bomb, this becomes even more urgent. With AI displacing jobs across sectors—including hospitality and travel—the only scalable solution is to bring more international tourists into the country,” he added.

Goyal also emphasised the untapped opportunities in cruise tourism. “With 7,500 km of coastline, India can become a booming cruise destination. We need terminals, infrastructure, and vision. The economic multiplier here is significant.”

Being a cradle of four major religions and home to rich spiritual traditions, why is India not doing activations for Buddhist circuits, he questioned. “Why aren’t we promoting Buddhist circuits globally? Why not religious charters, spiritual trails? Saudi Arabia earns from Hajj—why can’t we do the same?”

“This is a now-or-never moment. We cannot afford to delay. We must act boldly, think long-term, and place tourism at the heart of India’s growth story. If we do this right—open our skies, reduce taxes, empower our states, and promote India aggressively—we will not just reach 20 or 30 million tourists, but redefine India’s role as a global tourism powerhouse by 2047,” asserted Goyal.

On the other hand, while the progress made in India’s aviation is commendable, Walsh cautioned against complacency. “We must not take for granted the continued success of India’s aviation future,” he said, identifying three critical areas that require sustained focus: costs, airspace, and sustainability.

“Aviation is not a high-margin industry—globally, net profit margins are just 3.6%. Every cost matter,” he warned, saying India needs to rationalise aviation turbine fuel (ATF) prices, streamline compliance, and monitor airport user charges tied to service standards. Secondly, with thousands of new aircraft expected to join Indian fleets, airspace infrastructure must keep pace, said Walsh. Investments are especially needed in continental and oceanic airspace management, avoiding the congestion and inefficiencies seen in underinvested regions like Europe.

Notably, the industry’s goal of net zero emissions by 2050 is firm. India, as the world’s third-largest ethanol producer and consumer, is uniquely positioned to lead in Sustainable Aviation Fuel (SAF) production through the Alcohol-to-Jet (AtJ) pathway. “This would contribute to India’s energy security, propel the aviation sector’s growth and enhance India’s hub status in the region—delivering enormous social and economic benefits for India’s development,” said Walsh.

SpiceJet’s Hingorani raised concerns over the financial viability of India’s aviation sector, calling it one of the lowest-yield markets globally despite being the third-largest in terms of size and aircraft orders.

“According to IATA, India has the lowest per-kilometre revenue yield in the entire Asia Pacific,” Hingorani said, adding that airline profitability is heavily dependent on booking timelines. “Any domestic fare booked 30 days in advance is typically a loss for the airline. Only tickets booked within a 7-day window, usually by time-sensitive customers, generate profit.”

Hingorani also emphasised that of the 21 airlines launched in India over the past 25 years, only five have survived, pointing to persistent profitability challenges. He urged the travel trade to help educate consumers on fare structures, while assuring that airlines are working closely with regulators to ensure upper fare limits remain reasonable.

Pointing to tourism sector being neglected, Dr. Rajeev Singh, Director General of the Indian Chamber of Commerce (ICC), said the sector continues to face underfunding, despite its vast economic and employment potential. Singh continued to highlight how long-standing concerns of the industry remain unresolved even today.

Singh drew attention to the persistent structural challenges that stifle tourism’s growth. The paltry Union Budget allocation of INR 2,541 crore for tourism was flagged as inadequate for a sector that is both labour-intensive and high-impact. “On one hand, we’re facing a national employment crisis, further exacerbated by the advent of AI and automation. On the other hand, we have tourism—a sector capable of generating millions of jobs. Despite this, it remains one of the most underfunded,” he stated.

He called for faster implementation of policy decisions, especially at the state level. “While 17 states have accorded the tourism sector ‘industry status’, the ground reality still needs to match the policy intent.” One of Singh’s most actionable recommendations was to integrate tourism into the Gati Shakti framework—India’s national master plan for infrastructure. “An integrated dashboard that connects aviation, railways, urban development, land acquisition, taxation, and more—could be a game-changer.”

He proposed that, similar to Gati Shakti’s reporting mechanism to the PMO, tourism should also be empowered with a senior-level official to fast-track decisions and avoid bureaucratic delays.

Echoing Dr. Goyal’s call for greater proactivity, Singh stated, “We cannot wait for others to open their doors to us. It is in our national interest to proactively host a larger number of foreign travellers.” Positioning the Eastern region of India as a future tourism hub under the Act East and Neighbourhood First policies, he said, “The East, with its proximity to Southeast Asia, is perfectly positioned to serve as a connectivity and tourism gateway—but only if aviation and surface infrastructure are scaled up.”

He also called for expanding India’s tourism footprint: “Our tourism assets—from Uttar Pradesh to Madhya Pradesh and beyond—must be optimally utilised. India is too vast to rely solely on Delhi and Mumbai as international gateways. We need direct access, regional airports, and infrastructure that enables a broader tourism footprint across the country.”

Digital infrastructure for tourism: the third engine

IATA’s annual Global Passenger Survey revealed that travellers consistently prioritise speed and convenience throughout their travel journey. For India, prioritising digital identity and biometric recognition technologies such as Digi Yatra addresses travellers’ desires for faster processes and less hassle at airports, as also suggested by Albert Tjoeng, IATA’s Head, Corporate Communications. “These technologies transform passenger processing through Digitalization of Admissibility—where all travel documents are verified remotely in advance—and Contactless Travel, allowing travellers to arrive at the airport Ready to Fly and navigate airport touchpoints without presenting physical documents like passports and boarding passes,” he shared with T3.

According to Billa, India should aim for a “Travel Stack” by 2047, similar to its fintech revolution: a common digital infrastructure where identity (DigiYatra), payments (UPI), visa clearance, and health/security records are integrated to provide frictionless travel for all tourists. To create this digital stack, integrating the key pillars would help.

• DigiLocker + e-visa: A tourist’s e-visa can be tokenised into a QR code stored in DigiLocker, serving as their identity across India—from hotels to railway bookings to ASI monuments.
• DigiYatra + facial recognition: Enabling fast, secure, and contactless entry at monuments, airports, and rail stations.
• UPI + currency exchange: Enabling digital payments for foreign tourists, even at local stalls, by creating pre-paid wallets linked to international cards. The Ministry of Finance is already working on enabling this via RuPay cards.

“This integrated ecosystem can ease travel, enhance safety, and drive real-time visibility for better management of tourists across the country,” said Billa, citing Estonia’s blockchain-based tourist identity model as a global example already working well.

Currency conversion, he added, remains a key concern for international travellers. Billa suggested the creation of a top-up wallet or prepaid card— potentially in rupees and usable via UPI—allowing tourists to transact anywhere from five-star hotels to local tea stalls, without cash or card hassles. The Ministry of Finance has already enabled provisions for RuPay cards to be extended in this manner.

From Silos to Synergy: Why we need a shared roadmap

To truly unlock India’s tourism potential, aviation routes must be strategically aligned with seasonal tourist flows, key events, and state Tourism calendars. What’s needed is stronger coordination between the Ministry of Civil Aviation (MoCA) and the Ministry of Tourism (MoT)—a policy gap that’s long overdue for correction. CAPA India, in one of its previous reports, suggests that with better synchronisation, India could potentially double its inbound tourism revenue by 2030 and increase aviation’s share in GDP by 2–3%.

A practical starting point would be the formation of a dedicated inter-ministerial task force—empowered to assess tourism demand trends, infrastructure bottlenecks, and flight route deficits on a continual basis. Destinations like Singapore, Turkey and the UAE have demonstrated how aligning aviation strategies with tourism goals can drive exponential returns.

Goyal’s boldest pitch in this regard was structural: “Tourism and aviation are two wheels of the same chariot. They must be one ministry. You cannot promote tourism without aviation. Without synergy, we’re fighting a losing battle.”

On similar lines, Billa called for a fundamental shift in policy approach— from working in silos to institutionalised collaboration. “Can we map the National Air Connectivity Plan with the National Tourism Development Plan?” he asked. Aligning route development with seasonal tourism demand and destination prioritisation could unlock substantial untapped value.

He proposed the creation of a joint task force between the Ministries of Civil Aviation and Tourism to formalise this collaboration—an idea previously floated by his ministry. Billa laid out three immediate opportunities and practical areas for collaboration: Airport Prioritisation: where the airports should be developed in tandem with emerging tourism hubs; Route Planning Sensitivity: How seasonal tourism trends must inform airline route development strategies and Ease of Travel Enhancements: which will simplify movement and access across India, especially for international visitors.

Calling for a more integrated approach to infrastructure planning, Lohani encouraged the need to form a coordination committee. “As tourism basically means travel and travel in India means railways and aviation, perhaps as a first step, a coordination committee of senior officials from the Tourism Ministry, Civil Aviation and Railways can be formed. This committee can meet quarterly to find solutions to connectivity related issues in the overall interest of development of tourism in the country,” he said.

Adding his viewpoint, IATA’s Tjoeng shared, “Collaboration and cooperation among aviation stakeholders, particularly governments, is essential to remove regulatory barriers and enable the industry to leverage digital identities for a more seamless, efficient, and interoperable travel experience.” He said that by working together, the industry can not only streamline operations and enhance customer satisfaction but also boost security and reduce costs.

As WTTC estimates India’s travel & tourism sector could contribute nearly USD 500 billion to GDP by 2047, aviation’s role as the enabler of this dream cannot be overstated. As India stands at the cusp of a historic opportunity, the vision of India@2047—an inclusive, globally admired, and economically powerful nation—can be powered by aviation and tourism if they are allowed to co-pilot progress. With the right coordination between these key sectors, not only can we double the sector’s contribution to GDP, but we can also generate high-impact employment, revive lesser-known destinations, and decentralise economic growth.