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FDI in India's tourism sector to rise to $1.5 B
By siliconindia
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Tuesday, 13 February 2007, 18:30 IST
In a move to further liberalize regulations for the inflow of FDIs, the Indian Government has stated a re-visit to the foreign equity cap in the infrastructure sector in March.
This would lead to an estimated three-fold rise in FDI in the tourism sector to $1.5 billion by 2010 from the current level of $ 450 million.
Dr Ajay Dua, secretary of the Department of Industrial Policy & Promotion (DIPP), stated this while addressing an interactive meeting organized by the Federation of Indian Chamber of Commerce and Industry (FICCI) with hoteliers and tourism giants representing the Asian-American Hotel Owners Association.
Even though the FDI inflow in India's tourism and hotel sector has amounted to USD 450 million in the last 15 years, this was not in sync with the opportunities available. He said "the situation (in the hotel sector) is fast changing and major foreign hotel chains such as Shangri-La, Accor, Marriot, InterGlobe, Indo-Asia Tours have major projects at hand in India and the industry certainly has a very bright prospect.
Habil Khorakiwala, FICCI president, is of the view that there was a need for budget hotels. The ministry, he hoped, is taking steps to give new budget hotels a 10-year tax rebate as well as encourage railways to give up some of its vast landholdings for trackside hotels.
He said that uncertain levels of taxation in various states have made foreign investors wary of investing in India. While some states have made their policies attractive by offering a range of incentives to attract investors, many states lag behind.