A Study on the Impact of Terrorism on Tourism Sector in India: An Empirical Approach

The tourism industry plays a key role in the economic growth of a nation. Tourism is an important driver of world trade and prosperity. Tourism also significantly contributes toward the foreign exchange reserves of a country and provides employment to people with meagre amount of investment. The acts of terrorism not only cause loss of life but also loss of confidence of foreign tourist arrival in the country. Our study will try to evaluate the impact of terrorism on the tourism industry in India. The present study uses time series data on foreign tourist arrival in India and major terrorist attacks from 1991 to 2015. The present study uses regression models wherein the impact of terrorist attack on successive arrival of tourism has been measured. The study finds significant impact of terrorist attack on tourist arrival both in current year and successive years. At the policy level, the present study recommends the Government of India to strengthen internal security which will give a sense of confidence and security for the guest coming to India.