US-Iran war increases tension, foreign tourists are turning away from India; 18000 crore blow to tourism and air travel

War Impact on Tourism Sector: PHD Chamber of Commerce and Industry (PHDCCI) has said in its new report that the ongoing war in West Asia has caused a lot of damage to India’s tourism, air travel and hotel-restaurant business. According to the report, the number of tourists coming from abroad has decreased by 15 to 20 percent and the aviation sector has suffered a loss of about Rs 18,000 crore.

According to this report, the restaurant business has suffered the most. The report says that about 10 percent of the restaurants have been closed and a huge decline of Rs 79,000 crore has been recorded in their business every month.

Its contribution to GDP

Tourism and hotel industry in India contributes 8 percent to the country’s GDP and provides employment to more than 4 crore people. This sector had made a very good recovery in the year 2025. The number of rooms in branded hotels had reached around 2 lakh and more than 5 lakh passengers were traveling in domestic flights every day. But the whole situation changed after the war in West Asia broke out in the beginning of 2026.

air travel most affected

The PHDCCI report says that the airline companies have been most deeply affected. Many flights were cancelled, some airfields were closed and routes had to be changed. Because of this, foreign flights started taking 2 to 4 hours more time. Due to increase in fuel consumption the expenses increased a lot. Fuel accounts for 35 to 40 percent of the total cost of air companies. Ticket prices have also increased due to disruption of busy air routes in the Middle East.

foreign tourists panicked

People coming to visit from abroad are coming less now, especially those coming on holidays. According to this report, global travelers have become cautious of geopolitical tensions. Indian travelers are also now preferring nearby countries like Thailand, Singapore and Vietnam instead of distant places. At the same time, the hotel business is still running with the help of domestic tourists. Room occupancy rate in hotels remains fine, but profits are under pressure due to rising cost of electricity and water and less arrival of foreign guests.

Double crisis on restaurant business

According to data from the National Restaurant Association of India, prices of food items have increased by 10-15 percent. Small and medium restaurant owners are facing a lot of problems due to the cost of imported ingredients, transportation and electricity. Foreign customers have decreased in expensive restaurants in tourist places. However, people inside the country and food delivery (which accounts for 20-30 percent of the income of many big restaurants) are getting some relief.

Domestic tourism provided support

The report clearly states that tourists traveling within the country are the biggest force at this time. People are still spending money on traveling on holidays, resting in hotels and eating good food.

These important suggestions from the government

PHDCCI has made many important recommendations to the government like being less dependent on war zones, developing new airways, reducing taxes on Aviation Turbine Fuel (ATF), hotel and food and beverage sector, giving easy and cheap loans to small businessmen. Apart from this, it is also said that it is necessary to promote domestic tourism, make the visa process easier and market India well in other countries.

The final conclusion of the report is that even though the war in West Asia is still creating some difficulties, it is also a good opportunity for India to make its tourism sector stronger, diverse and self-reliant. With strong domestic demand and government-industry collaboration, this sector can recover quickly and grow rapidly in the future.

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