The Indian travel market experienced a year of stark contrasts in 2025. While domestic aviation grappled with operational disruptions and tragic events that affected traveller confidence, the international segment continued to scale new highs. The divergence underscores structural supply constraints even as demand momentum remains strong.

Guest column by Virendra Jain
The Indian travel market witnessed an unprecedented 2025. Amid an all-time high in passenger numbers across air and rail, and a hotel industry that shows little sign of slowing, the sector was also impacted by war, geopolitical upheaval, accidents, and airline operational challenges.
The air market began the year at nearly five lakh passengers per day, and continued to rise until the Pahalgam incident in April 2025. As the market prepared for recovery, it encountered another setback in the form of the Ahmedabad plane crash. The incident struck deeper, dampening trust in air travel.
The share of Indian airlift serviced by Indian carriers has been consistently rising and remains a key policy focus of the current administration. However, as of 2025, this share stands at 44% and is unlikely to increase materially in the near term. IndiGo will need to address FDTL compliance before expanding further on short-haul international routes, including midnight connections to the UAE. Meanwhile, the Tata Group, with limited fleet size and an ongoing modernisation programme, is not positioned to drive a significant shift in market share. As with the domestic market, India’s international air segment remains demand-driven and supply-constrained.

The irony
Low-cost carriers, by design, operate point-to-point short-haul routes with minimal operational and distribution costs, typically favouring direct distribution. More than 80% of Indian domestic air traffic is serviced by LCCs. In theory, this should have resulted in a minimal share for online travel agents.
However, OTAs account for around 80% of the online domestic air gross booking value of $7.4 bn, and 70% of the online international air gross booking value of $3.6 bn. International air gross booking value stood at $16.9 bn in FY24, with online penetration at 21%, making it one of the most underpenetrated travel categories in India.
The explanation lies in the evolution of Indian e-commerce. Travel was the country’s original e-commerce category. OTAs entered the market around 2005 through air distribution, educating consumers and building trust in online bookings at a time when LCCs were focused on expanding seat capacity. That trust continues to define distribution dynamics, with OTAs retaining a dominant share of online travel.
Most India-based OTAs, along with meta players that later pivoted to full-stack models, began with air distribution before diversifying. Air remains the largest contributor to gross booking value for MakeMyTrip, and accounted for over 90% of gross booking value for EaseMyTrip and Cleartrip in FY24.

What next?
Passenger trends suggest that Indian travel and tourism demand is unlikely to slow in 2026. In 2025, India averaged 4.57 lakh domestic passengers per day and 2.22 lakh international passengers per day, recording new single-day highs of 5.4 lakh and 2.6 lakh respectively.
Indian outbound travel remains modest at 31 million travellers in 2025, compared with 92 million active passports and a global diaspora of nearly 35 million Indians. China, the only comparable billion-plus population market, recorded over 150 million outbound travellers in 2019. China’s per capita GDP of US$ 13,000 is nearly four times India’s per capita GDP of approximately US$ 2,800.
As socio-economic growth continues, first-time international travellers are emerging from younger demographics, and digital adoption is expanding into the hinterland. A fourfold expansion of the international travel market remains within reach. This also reinforces the continued relevance of travel advisors, who account for nearly 80% of international air bookings made offline.
This is a guest column. The views expressed are those of the author and TravTalk may or may not agree with them.