Foreign visitor arrivals are of great importance to India’s tourism sector, which contributes largely to the overall GDP growth. The COVID-19 pandemic has resulted in countries shutting borders and initiating lockdowns to contain the virus. This, in turn, has had an adverse impact on the tourism sector in India.
The foreign visitor arrivals have declined by 66.5% y/y in March, and consequently, foreign exchange earnings have also suffered a decline by 64.0%. An extension of the lockdown for the month of April and perhaps even all of May, could mean that this is only the tip of the iceberg, and the worst is yet to arrive.