Guidelines for FDI in Hotels and Tourism

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Abstract:

This article provides an outline on the Guidelines for FDI in Hotels and Tourism. Indian tourism is one of the most booming sectors and is also a major contributor to the Gross Domestic Product in India. 51 percent of FDI is permitted in Hotels & Tourism in India under automatic route.

Sectors Receiving the Maximum FDI Inflows in Hotel & Tourism Industry in India-

Hotel and Tourism is one of the most booming sectors in Indian economy. It has contributed heavily in the Gross Domestic Product of India.

100 percent FDI is permitted in the Hotel and Tourism in India under various approvals. Under Automatic route, FDI is allowed only up to 51 percent in this industry. As per FDI guidelines for hotel and tourism industry in India, following are the sectors, in hotels, which have been receiving the maximum amount of FDI Inflows for the past few years:
  • Restaurants
  • Beach resorts
  • Tourist complexes which facilitates accommodation and catering to the tourists
As per FDI guidelines for hotel and tourism industry in India, following are the sectors in tourism which have been receiving the maximum amount of FDI Inflows for the past few years:
  • Travel agencies
  • Tour operating agencies and Tourist transport operating agencies
  • Units which facilitates cultural, adventure and wild life experience to tourists
  • Units providing surface, air and water transport facilities to tourists
  • Sectors which offers leisure, entertainment, amusement, sports, and health related facilities to the tourists
  • Convention/Seminar units and organizations

FDI in Hotels and Tourism Industries in India-

  • 100 percent FDI is permitted in the hotel and tourism industry in India under various approvals

  • Hotels offer restaurants, beach resorts, and other tourist complexes which provide accommodation or catering and food facilities to tourists

  • Tourism Sector includes tour operating agencies and tourist transport operating agencies, units which offer cultural, adventurous and wild life experiences to tourists, and various other entertainment programs which include, water sport activities, leisure games, amusement parks as well as the health care units

  • Automatic approval for foreign technology in the hotel and tourism sector will be availed if 3 percent of the total expense of the project occupies infrastructural developments

  • Up to 3 percent of the net turn over is payable as marketing fee under automatic route

  • 10 percent of the gross operating profit is payable as management fee under automatic route

Last Updated on 05/08/2011