FAITH, the policy federation of all the ten national associations representing the complete tourism, travel, and hospitality industry of India – ADTOI, ATOAI, FHRAI, HAI, IATO, ICPB, IHHA, ITTA, TAAI & TAFI has proposed ‘PM – HINES’ or ‘Prime Minister – Holiday in India Export Support’ for the upcoming foreign trade policy to fast track tourism, travel and hospitality exports from India.
PM – HINES is a combination of two existing similar support mechanisms of the government of encouraging duty-free exports and the PLI scheme. On a similar concept, to increase tourism, travel, and hospitality exports from India. PM – HINES is based on two key market principles such as the Drawback of all domestic duties, levies, and taxes which have become implicitly built into the price of tourism in India and Market linked Incentive based on increasing exports
The proposed formula by FAITH for PM- HINES highlights Domestic Duty Drawback: 5% of gross forex earnings from tourism travel & hospitality services as a base drawback for all tourism exports.
As per the proposed formula, the market-linked incentive includes a 1 % additional drawback for forex earnings if gross forex earnings are < US$ 50 million, in the financial year includes a 2 % additional drawback for gross forex earnings, if gross forex earnings are > US$ 50 million up to US $ 100 million in the financial year, 3% additional drawback for gross forex earnings, if gross forex earnings are > US$ 100 million up to US $ 200 million in the financial year, 4% additional drawback for gross forex earnings, if gross forex earnings are > US$ 200 million up to US $ 400 million in the financial year, 5% additional drawback for gross forex earnings if gross forex earnings are > US$ 400 million + in the financial year
Thus, any exporter of tourism travel & hospitality services will get the following duty incentive under PM – HINES as 6% of their gross forex earnings if gross forex earnings are up to $ 50 m in the financial year, 7% of their gross forex earnings if gross forex earnings are above $ 50 million up to $ 100 million in the financial year, 8% of their gross forex earnings, if gross forex earnings are above $ 100 million up to $ 200 million in the financial year, 9% of their gross forex earnings if gross forex earnings are above $ 200 million up to $ 400 million in the financial year. 10% of their gross forex earnings, if gross forex earnings are above $ 400 million in the financial year
FAITH believes this formula will immediately make tourism travel and hospitality exports super competitive globally as tourism enterprises will use the drawback incentive to market internationally, advertise, build global partnerships, and reduce overall prices which will lead to much-increased forex earnings.
FAITH pointed out that it encourages more and more tourism travel and hospitality companies to invest heavily in people, products, and infrastructure, which will lead to increased jobs Pan India GDP growth, and tax collections. It will also encourage global tourism enterprises to invest in India through the collaboration or JV route.
Pre – covid, India’s foreign exchange earnings from tourism were around $ 30 bn from around 11 mn foreign tourists and around 17 mn international travellers. India has a vast unmet global tourism potential and has the inherent cultural, geographical, spiritual, and people strengths to take its foreign exchange earnings from tourism, travel, and hospitality to $ 200 bn + by 2035 and $ 100 bn by 2045. The tourism Industry has the potential to create almost 10 crore direct and indirect jobs by 2035 and almost 15 crore additional direct and indirect jobs
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