Impact of Covid-19 on travel and tourism sector and how SEIS can bring relief

Travel and Tourism industry is an integral pillar of the “Make in India” program. The sector plays a significant role as an economic multiplier in creating jobs at a rapid rate. The travel sector has substantial sectoral output in MSME, having participants from the most prominent cities to the small towns and villages and the grassroots. Numerous initiatives taken by the Government of India, like the National skills development program, SEIS (Service Exports from India Scheme) and MICE (Meetings, incentives, conferencing, exhibitions), have led to substantial job creation at the ground level. With implementation of SEIS, India generated export revenue from tourism of approximately Rs 1,95,000 crore in 2018. In 2019, the total foreign exchange revenue was over Rs 2,10,000 crore.

According to the World Travel & Tourism Council (WTTC), in 2019, India generated about 5.6 per cent of total exports revenue. The sector employs nearly 40 million people and SEIS has immensely helped India’s tourism exports on several fronts. The incentives offered under SEIS, has given a scope for offering packages at competitive prices and attracting more visitors to the country. Speaking on the issue Maneck Davar, SPEC Chairman said, “The Services Exports Promotion Council has made representations to both the Finance and Commerce Ministries for the release of SEIS for the year 2019-20. We have conveyed repeatedly that service sectors, especially hospitality, medical and education have suffered hugely during the pandemic and any relief would be welcome. In order to ensure that benefit goes to medium and small service providers, we have suggested a cap so that no exporter avails of a benefit of more than 5 crores. The government has announced many schemes for the manufacturing sector but none for services, even though this sector has registered consistent growth and has been positive. ”

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IATO’s Senior Vice President E.M. Najeeb was of the view that the tourism industry has made a continued effort of requesting the government to release the SEIS under Foregin Trade Policy. “The interim order was passed by Justice PV Asha on the petition filed by Kerala Travel Mart Society (KTM) and On 9th April 2021, Kerala High court has given the order stating that the Govt. should disperse new policy within 2 months time and it should be announced,” he said.

However, since the pandemic has hit, the government has been ignoring the tourism industry. The tourism industry is undergoing one of its biggest existential crises. Spinning under the pandemic’s colossal blow, nearly 30% of inbound tour operators in India may shut their shops permanently; however, this figure could be as much as 60 to 70% as per some estimates. With restrictions on international travels and no tourism in the country, there have been severe effects on the revenues of tour operators. The revenues have choked and the tour operators and travel companies are seeking relief from the government in the form of re-implementation of SEIS. Continuation of SEIS can bring some immediate relief to the tour operators and millions of jobs could be saved as soon as covid-19 subsides.