Released on = June 23, 2006, 1:49 am

Press Release Author = RNCOS

Industry = Industrial

Press Release Summary = The Indian Tourism Industry is poised to grow as the GDP of
the country continues to increase and the Government allocates a substantial sum for
the tourism sector.

Press Release Body = Indian Tourism Industry has a strong relationship with the
economic growth of the country. As GDP continues to increase, it enhances investment
in basic infrastructure like transport system, which is a vital support to tourism
industry.

Closely associated is the hotel industry in India, which has added to the growth in
tourism since 2004. India has become one of the popular tourist destinations in the
world. Of course there has been the government's support through its "Incredible
India" campaign, which showed new light to foreign tourists. In 2005 the arrival of
international tourists grew by 16% giving boost to Indian tourism.

The Union Financial Budget 2006-07 has allocated Rs.8.5 Bn for tourism sector in the
tenth Five Year Plan. Having increased the service tax to 12% there is more expected
revenue for the government.

With the given allocation to the Indian tourism industry in the budget, the
Government appears to have realized the significance of this sector in earning
valuable foreign exchange as also enabling greater employment. As new destinations
develop the tourist inflow is anticipated to increase.

Several measures have been adopted in infrastructure, which will polish Indian
hospitality for the foreign visitors.

The Government of India has permitted a 100% FDI in the sector. It has also
necessitated certain requirements for its approval -
· Up to four percent cost of capital of any new project will be required to pay for
consultancy and technical services, including the fees for supervision, design,
architects etc.
· Up to four percent net turnover will be paid for marketing/ publicity fee and
franchising, while up to ten percent of total profits is to be paid for management
fee plus incentive cost.

RNCOS' latest market research report, "Indian Tourism Industry Outlook (2006)"
presents a discussion of the government's play in the development of Indian tourism
industry and the key factors that are driving the sector.

In a separate section, RNCOS analysts have dealt with the opportunities, challenges
and rising trends in Indian tourism. The report furnishes forecasts for different
markets in the Indian tourism sector.

The report also gives an in-depth analysis of the present situation and future
prospects of the Indian tourism industry.

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