Foreign tourist arrivals strongly correlated with travel search: RBI report

There is a strong association between foreign tourist arrivals (FTAs) and their travel search volume index to India as inbound tourism is emerging as one of the key economic growth drivers, according to a report in the Reserve Bank of India' s (RBI's) monthly bulletin for May.
Visits by foreign tourists, which dropped due to Covid-19 restrictions in March 2020, saw a revival in November 2021. There has been a significant increase in foreign tourists coming to India in 2023 due to the G20 Summit, meetings, incentives, conferences, and exhibitions (MICE) events, leisure trips, and the return of business travellers. The ICC Cricket World Cup also boosted India's tourism. There was also a surge in tourism in the first half of 2024.
According to the research paper, travel and tourism created 76.17 million jobs in 2022-23, which is 12.57 per cent of total jobs created during the same period. Also, the foreign exchange earnings from the tourism industry for 2023 reached ₹2.32 trillion, marking an increase of over 66 per cent compared to 2022.
'There is a significant correlation between FTA and GVA-THTCB (GVA - Trade, Hotels, Transport, Communication and Services related to Broadcasting) for Q4FY21 to Q4FY24 (0.71), which supports the earlier argument that FTAs contribute directly and indirectly to GVA (Gross Value Added),' the research paper said. The views in the report are that of the authors and not of the central bank.
'Empirical results show a strong correlation between FTA for the current month and travel search volume index for preceding five months,' the paper added.

Try Our AI Features

Explore what Daily8 AI can do for you:

Learn with AIFact CheckingText to SpeechAI Summary

Related Articles

The Hindu

22 minutes ago

• The Hindu

Palaniswami criticises DMK government for ‘lack of industrial development'

AIADMK general secretary Edappadi K. Palaniswami alleged on Sunday that Tamil Nadu was lagging in industrial development. In a statement, he criticised the DMK government for the State's borrowings in the past four years. Referring to Minister for Information Technology and Digital Services Palanivel Thiaga Rajan's recent statement that Tamil Nadu's industrial development was not so aggressive as that of the other Southern States, the former Chief Minister said it summed up the status of industrial development in Tamil Nadu. Listing the AIADMK government's contributions to industrial development, including during the COVID-19 pandemic, Mr. Palaniswami said it was because of those initiatives that the State had grown so far. Citing figures from a report of the Department for Promotion of Industry and Internal Trade (DPIIT) for 2024-25, Mr. Palaniswami said that while Maharashtra and Karnataka took the first two positions in foreign direct investment, Tamil Nadu was placed fifth. The Leader of the Opposition in the Assembly also pointed to reports that the Madhya Pradesh Chief Minister had not only visited Coimbatore and Tiruppur districts and invited textile industrialists to invest in his State but had also opened office in these districts to help them out. Though steps were taken during AIADMK rule for facilitating the establishment of semiconductor industries in the State, these units went over to Gujarat and Assam because of the DMK government's 'lackadaisical attitude'.

Indian Express

an hour ago

• Indian Express

Developments since June 6 decision show why we need to be cautious: MPC's Nagesh Kumar

The Reserve Bank of India's (RBI) decision earlier this month to tighten its stance to 'netrual' from 'accommodative' even as it cut the policy repo rate by a larger-than-expected 50 basis points (bps) to 5.50 per cent caught markets off-guard. However, according to Nagesh Kumar, one of the three external members on the central bank's Monetary Policy Committee (MPC), developments since the June 6 rate cut show why policymakers need to be cautious. 'Although the inflation numbers up to May are looking very good, with oil prices shooting up due to the Israel-Iran conflict, you never know what is in store. So, a neutral stance allows you freedom to adjust your actions. Since the MPC's decision on June 6, a lot has changed. We live in a very dynamic world, and that is why we need to be cautious,' Kumar said. Global crude oil prices rose to around $75 per barrel after Israel attacked Iran on June 13. Investors are now anticipating another sharp increase in oil prices after the US said on June 21 it had bombed three Iranian nuclear facilities. Speculation is rife if Iran – which has called the US attack outrageous and said it reserves all options to defend its sovereignty – will look to retaliate by blocking the Strait of Hormuz, a key waterway which handles almost a quarter of the global oil trade. In an interview with Siddharth Upasani, Kumar – Director and Chief Executive of New Delhi-based think-tank Institute for Studies in Industrial Development – also discussed how a consensus was finally achieved on his calls for a 50 bps rate cut and why growth numbers are not showing a broad-based revival, among other subjects. Edited excerpts: In the last meeting (in April) itself I had started making a case for a 50 bps cut. But at that time, trends were not very clear. There was uncertainty about the inflation number – it had begun to come down, but the drop was not significant enough. However, in June, we had numbers before us like 3.2 per cent in April. It has gone down even further in May. Looking ahead, the outlook seemed to be quite comfortable and benign because of the expectation of a better-than-normal monsoon, the declining prices of crude oil, and the softening of the US dollar. It was in that context and keeping in mind the continued concern about tariff-related uncertainties –the external economic environment had become very uncertain and volatile, with International Monetary Funds and Organisation for Economic Co-operation and Development downgrading the outlook very significantly, and World Trade Organization (WTO) projecting -1.5 per cent growth in world trade – and the need to support growth and the continued concerns about urban consumption and private investment not picking up that we cut the repo rate by 50 bps. In my view – and I articulated this in the April meeting – compared to two cuts of 25 bps each, one larger cut of 50 bps would be more effective. My reason was very common-sensical: if it is a quarter percentage point reduction, the banker might absorb a part of it as it is such a small change. But if it is 50 bps, the banker will have to pass it on with lower lending and deposit rates. We have seen the transmission of the 25 bps cuts being a bit slow. Of course, there will be a lag. But the stickiness of the deposit and lending rates was there. But 50 bps would be large enough to push the banks to take it into account. And if we feel confident that we will need another cut of 25 bps two months down the line, why not frontload it? That's why I made a case for a 50 bps cut. And this time, compared to April, the reason and policy space were much more solid. Seeing that, the consensus between us was easier to achieve. Well, at that time, inflation was high. And inflation targeting requires action when inflation is high. Even till October 2024, when the MPC was reconstituted, inflation was quite high around 6 per cent. The RBI's action also needs to be seen in the context of growth. We ended 2023-24 with a very robust 9.2 per cent growth. Growth was much less of a worry at that time. Yes, 7.4 per cent was a pleasant surprise and showed some kind of revival. However, it was not a broad-based revival; it was driven by rural consumption and government capex towards the end of the financial year. Because it was not broad-based and the external environment is becoming more challenging and uncertain – Liberation Day was in April – this is the time when you need to build policy actions which will protect the growth sentiment and build momentum. The change in the stance to neutral caught everyone off-guard, with the MPC saying there is very limited space to support growth going forward. Should we rule out rate cuts now? The way inflation outlook is shaping will determine the future course of action. The RBI Governor, in a recent interview, has clarified that. It depends upon what kind of inflation you have because you need to have a certain real rate of interest. If that becomes negative, then savings will not be incentivised. Assuming that 1.5 per cent is the real rate of interest you want to preserve, then the floor (for repo rate) with inflation rate would be 5.5 per cent. However, if inflation goes to 3 per cent, then you have additional room to manoeuvre. Therefore, it really depends on the dynamics of the inflation and growth numbers. I wouldn't say that. Strictly speaking, the stance is not within the purview of the MPC. But we, of course, make some observations. I think it was purely the fact that with the 50 bps rate cut, the room (to cut further) going forward is limited. In view of that, it was a step to manage expectations. The uncertainty surrounding us is another factor to keep the stance neutral, which gives you more freedom to go either way. Although the inflation numbers up to May are looking very good, with oil prices shooting up due to the Israel-Iran conflict, you never know what is in store. So, a neutral stance allows you freedom to adjust your actions. Since the MPC's decision on June 6, a lot has changed. We live in a very dynamic world, and that is why we need to be cautious. When circumstances are uncertain and you want to promote growth, you try to reduce the cost of capital to make it easier for the entrepreneur who is sitting on the fence on whether to invest or not. That is what it does at the margin. Ultimately, investment decisions are a very complex process. But the cost of capital is one of the factors which is weighed by the entrepreneur, and policymakers try to assist the process. By lowering the cost of capital and trying to push demand, you are creating more favourable conditions for an investment decision than before. As I said, making an investment decision is a very complex process and cost of capital is only one of the factors. You can only exercise the levers which are within your control. You can't really do much about global uncertainty. What Mr Trump does on a day-to-day basis is something you have no control over. But holding other things constant, these (such as lowering the cost of capital) are some of the things which we can do something about. The other could be a fiscal stimulus which may be helpful to revive demand. The government has budgeted for a very substantial capex. So, frontloading the capex to keep the momentum up while things settle down in the international market could be another thing that could be done. Well, they are reacting to the changed times. We are now in a situation where the multilateral framework for trade has been completely put aside. MFN (Most Favoured Nation) – which has been the bedrock of multilateralism – has also been thrown out the window because Mr. Trump has X rate for China, Y rate for India, Z rate for Europe. The dispute settlement mechanism of WTO has been abandoned for some time because the Appellate Body was not renewed. In normal times, you don't have that urgency and you negotiate in a very relaxed manner. But when you need to, you find ways to expedite the process. That is what is happening. There is a realisation that we need to seize the moment and close these deals quickly before the damage is done, to protect and preserve our economic interests in the best possible manner. Sooner we do that, the better it is. Then the uncertainty that is prevailing is cleared. Yes, some of these are the early harvest type of arrangements, and they will continue to be negotiated. But normally in trade negotiations, you know what you can do for a large part of the agenda and only a small part, maybe 10-20 per cent, holds up progress. So, the best way forward is to move ahead with the part of the agenda on which you have no issues and find ways to address the red lines. Siddharth Upasani is a Deputy Associate Editor with The Indian Express. He reports primarily on data and the economy, looking for trends and changes in the former which paint a picture of the latter. Before The Indian Express, he worked at Moneycontrol and financial newswire Informist (previously called Cogencis). Outside of work, sports, fantasy football, and graphic novels keep him busy. ... Read More

Hans India

2 hours ago

• Hans India

Sensex, Nifty outlook for June 23–27: Bullish breakout ahead?

The Indian stock market wrapped up a bullish week (June 16–20), with the Sensex closing at 82,408.17 and the Nifty 50 ending at 25,112.40 — both comfortably above key pivot levels. The rally was powered by strong FII inflows, easing RBI provisioning norms for infrastructure loans, declining bond yields, and a dip in volatility and gold prices. Market sentiment got a further boost as the Reserve Bank of India relaxed its earlier draft rule, now requiring just 1% provisioning for under-construction infra loans versus the proposed 5%. This move notably lifted banking and financial stocks. Additionally, easing tensions in the Middle East added to optimism. While geopolitical concerns remain, the US President's statement to delay military involvement in the Israel-Iran conflict hinted at potential diplomatic engagement. Market Performance Recap: Sensex rose 1.5% this week. Nifty 50 added 1.3%. FIIs invested ₹8,709 crore; DIIs added ₹12,635 crore. Global indices, however, underperformed, with the Dow down 1% and the Nasdaq flat. Key Drivers for Next Week (June 23–27): US Economic Data: Focus on GDP and PCE inflation. Geopolitical Developments: Monitoring Middle East tensions and the US-China 90-day truce deadline. Monsoon Progress in India FII/DII Activity and Crude Oil Prices Monthly Derivatives Expiry Volatility Technical Outlook: Resistance: 25,250. A breakout may lead to 25,600–25,800. Support: 24,850–24,800 zone. Breakdown below 24,600 may trigger further correction. Indicators: Nifty is trading above both 21-day and 55-day EMAs, signaling strong momentum. Investor Strategy: Experts advise a stock-specific approach. Look for strength in banking, auto, realty, and IT sectors. Avoid heavy exposure to FMCG, energy, and mid/small caps until clearer signals emerge. Traders are also urged to be cautious of false breakouts near 25,200, especially ahead of monthly expiry. Monitor both global developments and technical resistance levels closely.