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Maldives vs Lakshadweep controversy: How India contributes to Maldives' economy through tourism

Countries looking to attract Indian travellers are exploring varied strategies by expanding routes and providing customised on-ground hospitality and affordable packages.

Puja Sethi Written By: Puja Sethi @pujasethi11 New Delhi Updated on: February 07, 2024 17:51 IST
Maldives president Mohamed Muizzu
Image Source : AP Maldives president Mohamed Muizzu

Disparaging remarks by Maldivian politicians about Prime Minister Modi's Lakshadweep trip have ignited a major controversy, resulting in widespread calls to boycott Maldives as a preferred tourism destination for Indians. Despite the suspension of three officials for their derogatory posts, the damage appears to have been done for the island nation which relies heavily on its tourism sector for economic sustenance.

In 2023, India emerged as a key player in the Maldives' tourism landscape, dominating the number of tourist arrivals with 2,09,198 tourists followed by Russia and China out of a total of 17,57,939 tourists. The tourism sector plays a pivotal role in the Maldivian economy, contributing a significant one-third to its GDP and employing 70 per cent of the nation's workforce. In a tweet, Ahmed Mahloof, former Sports Minister of the Maldives, already voiced his concern, stating that an Indian boycott would severely impact the Maldives.

Today, India stands as the biggest outbound tourism destination. 22 lakh Indians travelled in July 2023 as compared to 18 lakh in July 2022, registering a growth of 22 per cent. Experts project India's tourism market as a thriving sector. According to a report, outbound trips from India will surpass USD 42 billion by 2024. (Outbound Travel and Tourism - An Opportunity Untapped' by Nangia Andersen LLP in association with FICCI) 50 Million passengers to fly out of India per year by 2030. (Centre for Asia Pacific Aviation (CAPA).India Tv - Prime Minister Narendra Modi during his visit to Bangaram, in Lakshadweep.

Image Source : PTIPrime Minister Narendra Modi during his visit to Bangaram, in Lakshadweep.

Enticed by the nation's growing economy, young population, and an increasing appetite for international travel, countries are vying for Indian tourists. From easing visa restrictions to implementing visa-free travel arrangements, they are ensuring a seamless travel experience for Indians. Currently, approximately 26 nations welcome Indian citizens without the need for a visa. Sri Lanka, Thailand, and Malaysia have recently granted visa-free entry to Indians. Iran and Kenya have also joined the list and Germany is ready to welcome increasing numbers of Indian tourists. Russia has also proposed an arrangement with India that will allow tourists from both nations without visas if they travel in organised groups.

The popular destinations for Indians in 2022 have been Dubai, Bangkok, Singapore, London, and Paris. (Booking.com)

Europe sees 20 per cent of the travellers from India's outbound traffic. (Outbound Travel and Tourism - An Opportunity Untapped' by Nangia Andersen LLP in association with FICCI) 10 per cent of Indians travel to Australia and New Zealand while the rest of the traffic is towards Southeast Asia. (Nangia Andersen LLP in association with FICCI)

With around ten million foreign trips, Asia's top source of travellers in 2022 was India, registering a 190 per cent Y-o-Y rise in outbound travel. (IPK International's World Travel Monitor findings)

Countries looking to attract Indian travellers are exploring varied strategies by expanding routes and providing customised on-ground hospitality and affordable packages.

India is also implementing strategic initiatives through foreign collaborations and policy reforms. The government announced to spend 980 billion rupees ($11.9 billion) by 2025 on constructing and modernizing airports. In 2022, Delhi's Indira Gandhi International Airport ranked among the World's top 10 busiest international airports for the first time with 59.5 million passengers. (Airports Council International (ACI) world)

India's journey has been nothing less than extraordinary. It's the world's fifth largest economy, poised to become the fourth largest travel market by 2030 with total expenditure by Indian travellers to go up to USD 410 billion (Booking.com and McKinsey & Company). As per Goldman Sachs, India could be the second-largest economy by 2075. All these put a global spotlight on the fact that countries across the world cannot overlook the vast tourism potential that India holds.

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