Inbound international tourism development in India: A panel data analysis on its affecting factors

Tourism is a fast and continuous growing industry. Tourism generates new employment opportunities and it is a significant source of foreign exchange earnings for the country. Foreign exchange earnings generated through the inbound international tourism plays a significant role in the India´s economic growth. This paper identifies the factors influencing the inbound tourist demand in Indian states and union territories using panel data analysis (fixed-/random effects model) technique. The paper spans over 3 years (2010 to 2012) and across 35 states and union territories. The paper indicates that literacy rate, consumer price index, number of tourist operators, and presence of domestic, international or metro airport in states has a significant impact in determining the foreign tourists demand in Indian states.