Econometrics of Exploration: How Tourism Fuels India’s Economy

This study conducts an empirical investigation into the relationship between tourism and economic growth in India from 1990 to 2020. Employing the ARDL model for analysis, the research provides robust evidence supporting the tourism-led growth hypothesis. The findings indicate that foreign tourist arrivals exert a positive influence on India’s economic growth in both the short and long term. Additionally, gross capital formation emerges as a significant determinant of economic expansion, underscoring the pivotal role of investment in driving growth. The results of this study carry important implications for policymakers. To maximise the benefits of tourism, strategies should focus on enhancing tourism infrastructure, showcasing India’s rich cultural heritage, and diversifying the tourist base. By fostering a synergistic approach that balances immediate gains from tourism with sustained investments in capital formation, India can optimise tourism’s contribution to sustainable economic growth. Such measures will ensure the continued vitality of the tourism sector.