The travel and tourism industry, which has grown to a size of US$ 32 billion, offers scope for investment in hotels, resorts and tourism infrastructure
Foreign Direct Investment in Hotel & Tourism Industry is allowed upto 100%. The term hotels include restaurants, beach resorts and other tourist complexes providing accommodation and/ or catering and food facilities to tourists. Tourism related industry include travel agencies, tour operating agencies and tourist transport operating agencies, units providing facilities for cultural, adventure and wild life experience to tourists, surface, air and water transport facilities to tourists, leisure, entertainment, amusement, sports and health units for tourists and Convention/Seminar units and organizations.
For foreign technology agreements, automatic approval is granted if
1) Upto 3% of the capital cost of the project is proposed to be paid for technical and consultancy services including fees for architects, design, supervision, etc.
2) Upto 3% of the net turnover is payable for franchising and marketing/publicity support fee, and
3) Upto 10% of gross operating profit is payable for management fee, including incentive fee.
FDI in Hotel and Tourism Industry would continue to be governed by the earlier FDI policy in relation to Hotels and Tourism and not by the new Press Note 2 (2005 series) for construction development activities.