The State Bank of India. Photo via Partha Sarathi Sahana/Flickr.
After a period of economic growth below 5% along with inflation, business travel spending in India is expected to grow by 7.6% to $28.8 billion in 2015, according to the first “GBTA BTI Outlook — India” report by the Global Business Travelers Association (GBTA) Foundation.
Sponsored by Visa Inc., the semi-annual report includes the GBTA BTI — an index of business travel spending that distills market performance over a period of time.
“This forecast is a very positive sign for the potential of business travel growth in India in the years to come,” said Welf Ebeling, GBTA vice president, operations for Asia Pacific. “The recent landslide victory of Narendra Modi and the Bharatiya Janata Party (BJP) party in India’s May elections have renewed optimism for more pro-business reforms and accelerated infrastructure investment.”
“Winning 282 or 543 parliamentary seats appears to have given Mr. Modi and the BJP a mandate to repeat this success across India,” added Ebeling. “Even incremental success in these efforts should eventually spark greater economic and business travel growth.”
According to the GBTA, key highlights of the report include:
- Total business travel spending for India is expected to grow 2.1% percent in 2014 to $24.9 billion.
- Over the last 15 years, India has worked its way up the rankings of major global business travel markets from No. 24 in 2000 to the 10th ranked market in the world in 2013. India is expected to continue to move up the rankings and should pass Italy to become the ninth largest market in the next five years.
- Driven by both the growth of the middle class and size and multitude of business centers throughout India, domestic business travel spending has dominated, comprising 90% of total business travel spent in the country.
- Along with the ailing domestic economy, domestic business travel spend is expected to slow in 2014, only growing 2.2%. Thanks in part to the recent election results providing a boost in business and investor confidence, domestic business travel spend will regain its footing in 2015 advancing 7.7% to $24.2 billion.
- International outbound business travel spending has been volatile in recent years and is only expected to gain 1.1% in 2014. But it will see major improvement in 2015 as GBTA projects 7% growth to $2.6 billion due to renewed strength among India’s major trading partners, including China, Europe and the United States.
“With business travel forecast to experience more growth to and from India, travel will play a vital role in helping grow the Indian economy,” said Tad Fordyce, senior vice president, global commercial solutions for Visa.