Abstract

This study examines how tourism-related income can aid in lowering the current account deficit (CAD) of India from 2000 to 2025. The study employs regression analysis to investigate the connection between tourism profits and the current account balance using secondary data obtained from the Ministry of Tourism and the Reserve Bank of India. The findings indicate that tourism significantly lowers India's CAD, underscoring tourism as an essential foreign exchange source helps maintain the external balance. The study also identifies trends and fluctuations in tourism earnings over the last two decades and their influence on India’s external sector. By filling a research gap in post pandemic data and employing recent RBI statistics, this paper provides empirical evidence for policymakers to enhance tourism strategies as a tool to stabilize the current account deficit. The results underscore the importance of sustainable tourism development in promoting economic stability and achieving a more resilient external sector.