Tourism has emerged as an instrument for employment generation, poverty alleviation and sustainable human development. During 2003-2004, direct employment in the tourism sector was estimated to be 21.54 million. Tourism also promotes national integration and international understanding and gives support to local handicrafts and cultural activities.

Tourism in India has grown substantially over the last three decades. Foreign tourist arrivals in India recorded an increase of 13.2 per cent during the year 2005 as compared to the year 2004. India's share in the world tourism market during the year 2005 was 0.49 per cent, as against 0.44 per cent in 2004. Foreign exchange earnings during the year 2005 were Rs. 25,172 crores as against Rs.21,828 crores in 2004.

Domestic tourism plays a vital role in achieving the national objectives of promoting social and cultural cohesion and national integration. Its contribution to generation of employment is very high. With the increase in income levels and emergence of a powerful middle class, the potential for domestic tourism has grown substantially during the last few years. During the year 2004, about 366 million domestic tourist visits were made and for the year 2005 it was estimated at 382 million visits.