Determinants of tourism in India – empirical analysis

Tourism has become an important source of foreign exchange reserves and employment generation in India. It is becoming a main driving force of economic growth in India. Giving the importance of tourism in Indian economy and the volume of foreign exchange and the level of employment depends on tourism sector, it is necessary to analyze factors that are determining tourist arrivals to India. The purpose of this paper is to investigate factors that determine tourist arrival to India using a gravity model approach using the panel data for the period from 1991 to 2009 for the selected countries. The criterion for selection of countries is the tourist arrivals to India and the countries which have larger share in total tourist arrivals are selected for the analysis. The study indicates that the GDP and exchange rate, and infrastructure of other countries had a positive influence on the tourist arrivals to India. The exchange rate of India and distance have inversely related to tourist arrivals. Infrastructure was also significant except the internet users in India. The number of the people using internet in India has not so much influence on tourist arrival, it has a negative coefficient but it is not significant.