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With Ram Mandir in Ayodhya poised to open for the public, the religious site has the potential to attract over 50 million tourists every year and can create a multiplier effect on the economy, according to a report by brokerage firm Jefferies.

In a report titled ‘India Strategy : Ayodhya – Unlocking India’s tourism potential’, Jefferies noted that the opening of Ram Mandir can also set a template for growth in tourism by boosting infrastructure.

“A $10 billion makeover (new airport, revamped railway station, township, improved road connectivity etc) will likely drive a multiplier effect with new hotels and other economic activities,” the report said.

According to Jefferies, the tourism-to-GDP ratio in India is at 6.8% of GDP—below most of the large emerging/developed economies which have a higher ratio by 3-5 percentage points. In fact, tourism in India contributed $194 billion to the GDP in FY19 (pre-COVID-19) and is expected to grow at an 8% Compound Annual Growth Rate (CAGR) to $443 billion by FY33.

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According to Jefferies, religious travel is still the biggest segment of tourism in India. Several popular religious centres attract annual tourist traffic of 10-30 million despite the existing infrastructural bottlenecks.

“The creation of a new religious tourist centre (Ayodhya) with improved connectivity and infrastructure can create a meaningfully large economic impact,” the report said.

With religious tourism in Ayodhya projected to surge, the increase in economic activity will also impact multiple sectors including hotels, airlines, hospitality, FMCG, travel ancillaries, cement etc.

Ayodhya already set the template for infrastructure development as the first phase of a new airport in the city has become operational at the cost of Rs 1,450 crore ($175 million) and can handle one million passengers per year. An international terminal is expected to open by 2025 which is set to increase the capacity to handle 6 million passengers annually.

Ayodhya’s railway station has also been upgraded to double the capacity to 60,000 passengers/day. A 1,200-acre greenfield township is also being planned and road connectivity is being beefed up as well.