MSME facilitation and better infra key to unlock tourism growth: Crisil

New Delhi: India’s tourism sector, despite being one of the country’s largest sources of livelihoods, continues to underperform in terms of economic value creation due to weak supply-side conditions, a new report released by Crisil Intelligence said on Tuesday.

“Strengthening micro, small and medium enterprises (MSMEs) capabilities, destination infrastructure and service quality is critical to converting high visitor volumes into higher incomes and stable, year-round livelihoods,” it added.

The report, titled “Tourism for livelihoods: Building circuits of growth in India” said, “MSMEs dominate tourism in India, with notable presence in accommodation, transport, guiding, food services, crafts and experiences. This structure allows income to flow widely across towns, villages and heritage belts.” However, these units have limited ability to move up the value chain, restricting incomes, margins and capability to create year-round employment, it said.

In 2024, tourism was the country’s largest non-farm employer engaging more than 13% of the workforce and recording 2.96 billion tourist visits. The significant scale, however, did not translate to economic value addition as the sector accounted for only ~5% of the gross domestic product, well below the global average of 10%, the report added.

This also underscores the persistent gap between visitor arrivals and value creation.

In addition to enhancing destination-level enabling conditions, targeted support for tourism MSMEs is critical for translating visitor demand into higher value outcomes. agencies