CHENNAI: Summer vacations for Indians traveling to exotic destinations have been disrupted by conflict in West Asia and a weak rupee resulting in the costs of foreign trip packages rising by about 20%, offsetting the Centre’s reduction in tax collected at source (TCS) on such packages to 2% from 20% and 5%.The conflict also led to a sharp decline in international flights between April and June, the peak summer travel season for Indian families. Overseas travel has been hit hard, said Rajeev Mehra, general secretary of Federation of Indian Tourism and Hospitality Associations (FAITH). “We are seeing a significant decline in demand, with an overall decline of 15%-20% compared to last year (15 April-June 2026 vs. 15 April-June 2025).
About 35% of Indians used to travel to the UAE and the Gulf region, and this travel is now negligible. Travel to Europe has also decreased significantly.
Expensive vacations
The main reason is the war, which led to higher oil prices and insurance costs, which led to higher air ticket prices. He said that currency depreciation and visa delays further contributed to this decline. The US dollar has appreciated against the rupee by about Rs 10 over the past year – from Rs 84 to Rs 94 – making international travel more expensive, said Sriharan Balan, managing director of Madura Travel Service.
Travel fintech SanKash said overseas package costs rose 20% to 25% year-on-year in several sectors. “The increase is recent,” said Akash Dahiya, co-founder and CEO. “Until January, most flights were only 5-10% higher. The real jump came after the situation in West Asia deteriorated.” Traveler preferences have changed, said SD Nandakumar, President and Country Director, Holidays and Corporate Tours, SOTC Travel. “The Far East such as Japan, South Korea, Thailand, Vietnam, Philippines, China, Australia and New Zealand is still preferred.
Nepal and Sri Lanka, along with domestic travel across Kashmir, Ladakh, Himachal, Kerala, Andaman and the North East, continue to see steady momentum, he said.
