According to news agency Reuters, the recent appeal from India Prime Minister Narendra Modi to avoid unnecessary foreign travel will have consequences on the economics and activities of the travel industry.
India’s travel industry fears that Modi’s appeal will squeeze new bookings after inflationary pressure knocked down summer overseas inquiries by as much as 15%, industry and analysts say.
The pullback is set to hit the peak season for outbound tourism, when affluent families seek cooler locations in Europe and Australia, during school holidays that run from April to June.
India travel sector expects further negative effects on bookings
“The prime minister has a great following, and people sometimes take his advice very seriously … they may postpone it to next year,” said to Reuters Ravi Gosain, president of the Indian Association of Tour Operators, with more than 2,000 members. “We (had) already seen a 10% to 15% reduction in inquiries or business for this summer season.”
Last Sunday, Modi also called for people to ease back for a year on fuel consumption and purchases of gold jewellery, in an effort to trim India’s import bill of nearly $1 trillion during the Gulf crisis.
His appeal immediately spurred investors to dump travel aggregator stocks such as EaseMyTrip, Yatra Online and Ixigo, along with those of airline operators and holiday planners.
Air fares have already risen sharply, with carriers hiking fuel surcharges, making overseas travel more expensive even before factoring in costlier hotels and transport overseas.
As Reuters explains in its story, India’s tourism sector worth $231.6 billion, which supports a tenth of its jobs, is the world’s eighth largest and is projected to climb to fourth place within the next decade.
The outbound segment separately is expected to reach $55.39 billion by 2034 from $18.82 billion a decade earlier, the industry estimates.
Promoting instead domestic tourism
Modi’s call may boost pressure for the industry to promote low-margin domestic tourism, which accounts for just a fifth of a typical agent’s business, according to Sunil Kumar, president of the Travel Agents Association of India.
Industry bodies also urged the government to boost inbound tourism to offset foreign exchange outflows.
India’s outbound departures rose nearly 6% to 32.7 million in 2025, extending a trend of long-term growth, driven by rising incomes, easier visa access and social media influencers.
By 2027, India is expected to become the fifth largest outbound market, up from 10th in 2019, Ernst & Young said in a report, citing research and brokerage firm Bernstein.
Modi’s speech could give a fresh boost to momentum towards domestic tourism, EaseMyTrip said in a statement.
However, analysts say it is a plea, rather than a policy change, though they expect near-term pain.
“This is definitely going to have an impact in the short to medium term,” said Kranthi Bathini, director of equity strategy at WealthMills Securities. “But if there is a cool-off in crude oil prices, we can see a rebound.”
