Currency from Culture: Tourism’s Role in India’s Foreign Exchange Earnings

Abstract

The study explores the role of tourism in driving foreign exchange earnings (FEE) and its contribution to India’s economic growth. Using a quantitative research design based on secondary data, the analysis covers the period from 2011 to 2024, incorporating both the post-reform phase and the post-pandemic recovery period. Gross Domestic Product (GDP) data was sourced from the World Bank, while Foreign Exchange Earnings data was obtained from the Ministry of Tourism, Government of India. The findings reveal that FEE from tourism has experienced significant fluctuations over the years, reflecting structural, economic, and external shocks. A major contraction was observed during the pandemic years, followed by a notable rebound, which underscores the resilience of the tourism sector. However, recent volatility points to the sector’s vulnerability to global uncertainties such as inflation, geopolitical risks, and shifts in demand. The study further highlights that FEE has a positive and statistically significant impact on India’s GDP, emphasising tourism’s strategic role in sustaining economic growth. These results reinforce the importance of policy measures to strengthen tourism infrastructure, diversify tourism offerings, and enhance India’s competitiveness in the global tourism market.