India has the potential to become the number one tourist destination in the world with the demand growing at 10.1 per cent per annum, the World Travel and Tourism Council (WTTC) has predicted. In India, the Government spending on tourism is 153rd in the world at 0.9 per cent. China spends 3.8 of its budget on tourism and rates fifth in receiving the largest tourist arrivals (31.2 million) after France, U.S., Spain and Italy. India gets only 2.6 million tourists on an average per annum.

The WTTC's Tourism Satellite Accounting Research (TSAR), which measured tourism's share in the national economy in 160 countries over the last 10 years, has found a global shift away from Europe to Asia and the Far East in the last 10 years. According to WTTC study while outbound tourism had grown over last 10 years from 76 million to 179 (with the boom in the economy), the inbound traffic has remained almost static at 2.6 million arrivals. Business travel and tourism are also poised to grow in the coming decade. But because business travel has unique features of higher spending, requirement of services, higher expectations, world-class standards, telecommunications, efficient and convenient travel schedules, the public sector has to assess this growth and plan its services and policies to serve the growing segment.

Major attractions in India are the world's highest mountains, miles of coastline with excellent beaches, tropical forests and wildlife, desert safari, lagoon backwaters, ancient monuments, forts and palaces, adventure tourism and the Taj Mahal. The tropical forests in Uttaranchal, Madhya Pradesh, Karnataka, Orissa, Kerala and Rajasthan can be developed into major tourist attractions. Being located virtually midway between Europe and the Far East, Europe and South East Asia/Australia, India has a strategic advantage. Since all international flights have to, out of necessity fly over India, the country can develop one or two international airports with the best of transit facilities, inducing passengers to break journey and thereby facilitating visitor export.

The earlier setbacks in global tourism have strengthened the Department of Tourism's resolve to promote India's tourism through aggressive marketing strategies. The campaign under the banner of 'Incredible India' includes a wide ranging advertisement campaign in all prime print publications besides a global television campaign encompassing prominent English, French, German and Italian channels and an innovative online campaign on the world's most popular websites. The 'marketing mantra' for the Department of Tourism is to position India as a global brand to take advantage of the burgeoning global travel and trade and the vast untapped potential of India as a destination. It has also planned to promote spiritual tourism and its unique techniques of yoga, siddha, ayurveda and unani system of dealing with mental and physical rejuvenation by placing before the world, through tourist spots. A record 2.8 million tourists made their way from various parts of the world to India in calendar 2003, registering a rise of 15.3 percent over 2002, while as many as 4.5 million Indians traveled abroad accounting for a rough 30 percent growth. Tourism is directly linked with the economic growth of a country. The country's gross domestic product is expected to grow 8.1 percent in 2003, up from 4.3 percent in 2002.

The performance of India's tourism is noteworthy against the backdrop of two dreaded events; the Iraq war and severe acute respiratory syndrome (SARS), that had affected global travel significantly in 2003, forcing vacationers across the world to rein in their travel or holiday plans. According to a department of tourism, a predominant section of the India-bound traffic were leisure travelers who were originally headed for the United States and South Asian countries, but chose India instead due to SARS and the gulf war fears. The Department said travelers from the United Kingdom and United States comprised about 30 percent of all inbound traffic in 2003. The United States, however, still continues to be the top destination of Indians going abroad.