Inbound tourism needs government support, IATO seeks PM’s intervention

It is an important moment in our history. We have undertaken numerous initiatives to augment our infrastructure. It is the right time to strike across international markets. The Indian tour operator will ensure our success.

Inbound tour operators are the marketing arms of any government while attracting foreign tourists. Recently, the government has also taken a call to close all our tourist offices abroad effective two months back. It was a debatable issue, but that be so, we are left presently only with the marketing efforts of the Indian travel trade specialising in inbound. Hoteliers sell India only to the extent where they have their properties. But agents sell all of India, and cater to wider and diverse interest of travellers looking at India.

During covid times, much has changed for global tourism. Many agencies have shut down, some have retrenched their staff. The world is slowly coming back to business, some countries better than others. An inbound tour operator needs to reconnect with his counterpart; in many cases, with new faces. It calls for more investment; looked at another way, it calls for more support from government, a greater degree of hand holding.

IATO (Indian Association of Tour Operators), the trade body that handles the interests of the inbound tourism business, has written to the PM requesting him to support the trade at a time when the trade needs maximum help. Not just for themselves but also for the country’s interests in ensuring that we remain a preferred destination for the global traveller!

Towards this, the association president, Rajiv Mehra, has requested the PM’s intervention to restore SEIS (Service Export Incentive Scheme) or introduce an alternative scheme in the new Foreign Trade Policy, as the inbound tourism sector is still suffering and needs hand holding by the government.

Besides, it seeks roll back of TCS of 20 percent to 5 percent on Overseas Tour Packages announced in the Union Budget. These steps would place the tourism industry at par with foreign tour operators and help them compete with the neighbouring countries.

Also, during the current G-20 Presidency, where promoting tourism is one of the tracks, it would be most unfortunate if tourism suffers; he has pleaded that the Government extends a helping hand urgently to the tourism sector.

Mehra has mentioned that the inbound tourism industry in India was the worst affected due to Covid-19 pandemic. Post revival of international flight operations and reinstating tourist visas, only 30-40% of inbound tourism to India has revived so far. Either, SEIS should be restored or an alternative scheme benefiting the tourism sector should be announced in the Foreign Trade Policy 2023.

“We need to compete. But it becomes very difficult as the Government has withdrawn marketing and promotion support in foreign countries. Ended SEIS, not given any alternative benefit, GST is as high as 20-23 percent without any input tax credit, whereas neighbouring countries are charging 6-8 percent. To attract foreign tourists, we need to holistically look at all these issues. As regards the argument of revenue loss, it would be made up more than 100 times as it has a positive multiplier impact on the overall economy,” said Mehra.

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