India's Travel Industry Faces Potential Downturn Amid Government's Travel Advisory

India's Travel Industry Faces Squeeze Amid Prime Minister's Appeal to Avoid Foreign Travel

India's travel industry is bracing for a potential downturn in new bookings as Prime Minister Narendra Modi's appeal to avoid unnecessary foreign travel is expected to squeeze the sector. The industry is already reeling from a 15% decline in summer overseas inquiries due to inflationary pressure.

The peak season for outbound tourism, which runs from April to June, is typically a busy period for travel operators as affluent families seek cooler locations in Europe and Australia. However, the recent appeal by Prime Minister Modi may lead to a postponement of travel plans to next year, according to Ravi Gosain, president of the Indian Association of Tour Operators, which has over 2,000 members.

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The travel pullback is unfolding against the backdrop of rising global inflation, with crude oil trading above $100 a barrel after Iran's closure of the Strait of Hormuz choked off a fifth of global supply of oil and liquefied natural gas. On Sunday, Prime Minister Modi also called for people to ease back on fuel consumption and purchases of gold jewelry, in an effort to trim India's import bill of nearly $1 trillion during the Gulf crisis.

The appeal by Prime Minister Modi has led to a sell-off in travel aggregator stocks, including EaseMyTrip, Yatra Online, and Ixigo, as well as 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.

India's tourism sector is worth $231.6 billion, which supports a tenth of its jobs, and is projected to climb to fourth place within the next decade. The outbound segment is expected to reach $55.39 billion by 2034 from $18.82 billion a decade earlier, according to industry estimates.

Industry bodies have 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, according to Ernst & Young.

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Analysts say that while Prime Minister Modi's appeal may lead to near-term pain, a rebound in the sector could occur if crude oil prices cool off. "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."