Bangladesh political crisis dents already sluggish recovery in India’s foreign tourist arrivals

Written by Nagendra Tech

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India was already struggling with sluggish post-pandemic recovery in foreign tourist arrivals (FTAs) in the first half of 2024, with volumes still trailing those of 2019, even as the number of outbound Indian travellers surpassed pre-Covid levels. Then came the political crisis in Bangladesh, which further dented the recovery in FTAs.

The reason? Bangladesh accounts for the biggest chunk of India’s inbound tourist pie, and a steep fall in visitors from Bangladesh has negatively impacted the overall FTA numbers. India has traditionally been a major destination for Bangladeshi nationals, particularly for medical treatment, as well as for shopping and leisure.

Consider this: In the first six months of 2024, FTAs were 9.8 per cent lower than in January-June 2019. But by August this year, the gap vis-à-vis the corresponding period of 2019 widened to 10.5 per cent, according to the latest available data from the Ministry of Tourism. FTAs during January-August this year were 61.90 lakh, compared to 69.15 lakh in the corresponding period five years ago.

In contrast, departures of Indian nationals from the country in the eight months ended August rose 12 per cent over the corresponding period in 2019 to a little over 2 crore.

Data from the Bureau of Immigration (BIS) shows a stark drop in FTAs from Bangladesh in July and August, when the political crisis in Dhaka was at its peak. This crisis eventually led to Sheikh Hasina resigning as prime minister and fleeing the country on August 5.

In July, FTAs from Bangladesh fell 20.3 per cent year-on-year to 1.57 lakh, while in August, the decline was much steeper – 38.1 per cent year-on-year – to 0.99 lakh, according to BIS data presented in Parliament recently by the Ministry of Tourism. For January-August 2024, FTAs from Bangladesh declined 9.1 per cent year-on-year to 12.86 lakh.

Bangladesh’s share in India’s FTAs in January-August was 20.8 per cent, while in August, it was notably lower at 15.6 per cent, as per Ministry of Tourism data. In the first six months of 2024, Bangladesh’s share was 21.6 per cent, and for the entire 2023, it was 22.3 per cent.

FTA and Indian nationals’ departure data is released with a lag and August is the last month for which data from the Ministry of Tourism as well as BIS is publicly available.

Beyond the Bangladesh effect, industry watchers attribute the divergence between foreign tourist arrivals into India and Indians travelling overseas to a combination of reasons, including subdued tourist footfall from China. The absence of direct flights between India and China since the beginning of the Covid-19 pandemic in 2020 has clearly dented the number of Chinese nationals travelling to India.

The other major factor is other Asian countries attracting more travellers with easy visa regimes and more value-for-money propositions for tourists. These include some already popular countries in Southeast Asia and some emerging destinations, particularly in Central Asia, that are rapidly growing as international tourism destinations.

“Countries such as Qatar, Dubai, Vietnam and Sri Lanka are drawing tourists with more affordable options and favourable visa policies. These destinations have exceeded their pre-Covid levels, with FTAs in Qatar up 47%, Dubai 11%, Vietnam 4% and Sri Lanka 0.2% in the first half of the current calendar,” CRISIL Market Intelligence and Analytics said in a note in September.

It added that aggressive campaigns by emerging destinations such as Azerbaijan, Georgia and Kazakhstan are competing for tourist spends.

In fact, the number of Indians travelling to such destinations has shot up significantly in the post-pandemic period. In July, The Indian Express had reported a surge in the number of Indians travelling to Silk Road countries such as Azerbaijan, Uzbekistan, Kazakhstan, and Georgia, and Southeast Asia’s latest tourism hotspot, Vietnam.

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