In This Guide
Quick Cost Summary
Rs 1.5L - 25L
depending on scale
Look, I'll be straight with you. India is probably the best place on earth to start a travel agency right now. Not because it's easy—it's actually quite chaotic—but because the numbers are just too good to ignore.
We've got 50 million Indians traveling abroad by 2028. That's the projection anyway. And honestly? Looking at the current trajectory, it might be conservative. The domestic market is even crazier—600 million trips a year and growing. Meanwhile, the cost to start here is a fraction of what you'd pay in Singapore or Dubai.
I've seen agencies start from a laptop in a 2BHK flat and hit Rs 50 lakh annual revenue within 18 months. I've also seen people blow through Rs 20 lakh and shut down in 6 months because they got the fundamentals wrong. The difference usually comes down to three things: choosing the right niche, not over-investing too early, and actually understanding how the supplier ecosystem works here.
This guide covers everything—from the boring paperwork stuff (GST, MOT, company registration) to the actually useful stuff like which niches are printing money right now and how to get decent rates without already having volume. Let's get into it.
Why India, Why Now
The short version: massive demand, low costs, and surprisingly few agencies actually doing things properly.
27M+
Indians traveled abroad in 2024
$32B
Outbound spending annually
15%
YoY market growth
600M
Domestic trips per year
Here's what most people miss about the Indian market though. Yes, there are thousands of travel agencies. Walk through any commercial complex in any tier-2 city and you'll find three or four. But most of them are stuck in 2010—still doing things on paper, no online presence, limited supplier access.
The opportunity isn't in competing with them directly. It's in serving the segments they can't reach or won't serve properly:
- Tier-2/3 city outbound: People in Jaipur, Lucknow, Coimbatore want to travel internationally. Local agents don't have proper supplier relationships. You can serve them digitally from anywhere.
- Young professional travelers: The 25-35 demographic books everything online but still wants someone to handle complex itineraries. They're not going to their parents' local agent.
- Corporate travel: Growing companies in the startup ecosystem need travel management but can't afford the big TMCs. Huge gap here.
- Niche experiences: Wildlife safaris, heritage walks, culinary tours, photography expeditions. Indian travelers are getting sophisticated.
The Real Advantage
Your operating costs in India are 5-10x lower than Singapore or UAE. A team of 3 running a Rs 2 crore annual operation is totally viable. Same setup in Dubai? You'd need Rs 8-10 crore just to break even.
Step 1: Registering Your Business
First things first—you need a legal entity. India gives you several options and honestly, the right choice depends on your situation.
Your Options
| Entity Type | Good For | Cost | Annual Compliance |
|---|---|---|---|
| Proprietorship | Testing the waters, solo operation, lowest hassle. Just get GST registration under your own name. | Rs 2,000-5,000 | Minimal (just GST & ITR) |
| LLP | Partnership-based, decent credibility, moderate compliance. Popular with husband-wife teams. | Rs 8,000-15,000 | Rs 5,000-10,000/year |
| Private Limited | Best credibility, required for serious B2B, easier funding access, required for some supplier tie-ups. | Rs 15,000-25,000 | Rs 15,000-30,000/year |
My take: If you're doing B2B or want MOT recognition, go straight to Private Limited. The Rs 10,000-15,000 extra you spend upfront saves headaches later. Suppliers and corporate clients take you more seriously. Plus, some DMC platforms only work with Pvt Ltd companies.
If you're testing a niche idea or doing pure B2C initially, start as proprietorship. You can always convert later—it costs around Rs 20,000-30,000 to upgrade to Pvt Ltd.
Registration Process (Private Limited)
- Get DSC (Digital Signature Certificate): Rs 1,500-2,000, takes 1-2 days
- Apply for DIN (Director Identification Number): Done during incorporation
- Reserve company name on MCA portal: Rs 1,000, takes 2-3 days for approval
- File incorporation documents (SPICe+ form): Takes 5-7 working days typically
- Receive CIN and incorporation certificate: You're now officially a company
Most people use a CA or company secretary service for this. Costs Rs 8,000-12,000 on top of government fees. Worth it unless you really enjoy navigating MCA's website.
Pro tip: When choosing your company name, include "travels" or "tours" or "holidays." Makes GST and MOT applications smoother. "XYZ Travels Private Limited" or "ABC Holidays Pvt Ltd" work better than generic names when dealing with government departments.
Step 2: Ministry of Tourism Recognition
Here's something that confuses a lot of people: India doesn't have a mandatory travel agency license. You can technically start operating the day you register your company and get GST. Nobody will arrest you.
But. And it's a big but.
MOT (Ministry of Tourism) recognition opens doors that stay firmly shut otherwise. Better supplier rates, access to government tourism schemes, marketing support, credibility with B2B partners—all of this comes with that recognition certificate.
MOT Recognition Categories
Inbound Tour Operator
For agencies bringing foreign tourists to India. Higher requirements, but comes with GST exemptions on some services.
- Min Rs 10 lakh turnover/year
- Office space requirement
- Trained personnel on staff
Domestic Tour Operator
For operators focused on tours within India. Slightly easier requirements.
- Min Rs 3 lakh turnover/year
- Office in India
- ITR for minimum 2 years
What You Actually Need for MOT Approval
- Registered office: Physical office with proper signage. A commercial space works, coworking usually doesn't.
- Minimum turnover: Rs 3-10 lakh depending on category (bank statements as proof)
- Financial documents: Audited accounts, ITR for 2 years, bank guarantee (Rs 1-2.5 lakh depending on category)
- Staff credentials: At least one person with IITTM/IGNOU tourism certification OR 3+ years industry experience
- Client testimonials: Letters from 10 clients confirming your services
Reality check: Most new agencies apply for MOT after their first year of operation. You need turnover proof anyway, and the inspection is easier when you have real operations running. Don't let MOT hold you back from starting—get it in year 2.
Timeline Expectation
MOT recognition takes 8-12 weeks typically. Document verification happens in Delhi, then they schedule a physical inspection. If you're in a metro city, inspection happens faster. Tier-2/3 cities sometimes wait longer for the inspection officer visit.
Step 3: GST & Tax Compliance
Okay, this is where it gets a bit technical. GST for travel services is... complicated. I'll try to make it less painful.
GST Registration
Mandatory if your annual turnover exceeds Rs 20 lakh (Rs 10 lakh for some northeastern states). But honestly, get it from day one. Suppliers won't work with you without GSTIN, and it costs nothing to register.
Process takes 3-7 days if your documents are clean. You need:
- PAN of business/proprietor
- Aadhaar of proprietor/directors
- Business registration documents
- Bank account details (cancelled cheque)
- Office address proof (electricity bill, rent agreement)
GST Rates You Need to Know
| Service | GST Rate | Notes |
|---|---|---|
| Domestic hotel bookings (via you) | 0-18% | Depends on room tariff: under Rs 1,000 = 0%, Rs 1,000-7,500 = 12%, above = 18% |
| Tour operator services (packages) | 5% (no ITC) | Composite supply rate. Simple but you can't claim input credits. |
| Air ticket commission | 18% | Only on your commission portion, not ticket value |
| Inbound foreign tourists | 0% | Export of services—zero rated if client is foreign entity |
| Outbound packages | 5% or 18% | 5% on tour operator services, 18% on pure agent commission |
The 5% scheme explained: If you operate as a "tour operator" selling packages, you can charge 5% GST on total package value but can't claim input tax credit. This is simpler for most small agencies—no complicated ITC matching. But if you're doing very high volumes with large input taxes (say, booking lots of 18% taxable hotels), regular 18% with ITC might work out better. Talk to a CA who understands travel.
Don't mess this up: File your GST returns on time. GSTR-3B by 20th of every month, GSTR-1 by 11th. Late filing means penalties and eventually your registration can get cancelled. Use software like TallyPrime, Zoho Books, or ClearTax—worth every rupee.
Other Compliance
- Income Tax: ITR due by July 31 (for most) or October 31 (if audit required). Audit required above Rs 1 crore turnover (some exceptions for digital payments).
- TDS: If you're paying rent, salaries, or commissions above thresholds, TDS applies. Monthly TDS returns + annual certificates.
- Professional Tax: Varies by state. Rs 200/month typically for each employee in Maharashtra, Karnataka, etc.
Step 4: Industry Associations (IATO, TAAI, TAFI)
These are optional but strategic. Membership signals credibility and—more importantly—gets you access to supplier networks and industry events where actual deals happen.
The Big Three
IATO
Indian Association of Tour Operators
- Best for inbound operators
- Strong international connections
- Annual convention is excellent for networking
Cost: Rs 15,000-25,000/year + Rs 50,000 one-time entry
TAAI
Travel Agents Association of India
- Oldest association (since 1951)
- Good for outbound focus
- Regional chapters are active
Cost: Rs 12,000-20,000/year + entry fees
TAFI
Travel Agents Federation of India
- More accessible for newer agencies
- Strong in western India
- Lower entry barriers
Cost: Rs 8,000-15,000/year
Should you join immediately? Probably not. Wait until you have 6-12 months of operations. Membership looks better when you actually have a business to talk about at events. The networking value is highest when you can discuss real client needs, not just future plans.
That said, if your uncle is a member who can sponsor you and get you into events, take the shortcut. Networking in India often works through warm introductions anyway.
Realistic Startup Costs (No BS Numbers)
I see too many guides throwing around numbers like "Start a travel agency for Rs 50,000!" That's technically possible if you count only registration fees. But it's not realistic for actually running a business. Here's what things really cost:
Scenario A: Lean Startup (Home-Based, Solo)
| Item | One-Time | Monthly |
|---|---|---|
| Company registration (Proprietorship/LLP) | Rs 5,000-15,000 | - |
| GST registration | Rs 2,000-5,000 (CA fees) | - |
| Laptop + basic setup | Rs 40,000-60,000 | - |
| Website (basic WordPress) | Rs 15,000-30,000 | Rs 500 hosting |
| Logo, visiting cards, branding | Rs 10,000-20,000 | - |
| DMC deposits/wallets (2-3 platforms) | Rs 30,000-50,000 | - |
| Software (CRM, accounting) | - | Rs 2,000-5,000 |
| Phone, internet, misc | - | Rs 3,000-5,000 |
| Marketing budget | - | Rs 10,000-20,000 |
| Working capital (3 months buffer) | Rs 50,000-1,00,000 | - |
| TOTAL | Rs 1.5-3 lakh | Rs 15,000-30,000 |
Scenario B: Proper Setup (Small Office, 2-3 People)
| Item | One-Time | Monthly |
|---|---|---|
| Private Limited registration | Rs 20,000-30,000 | - |
| Office setup (deposit + furnishing) | Rs 1,50,000-3,00,000 | Rs 20,000-40,000 rent |
| Computers, phones, furniture | Rs 1,00,000-1,50,000 | - |
| Website + booking engine | Rs 50,000-1,00,000 | Rs 3,000-8,000 |
| Branding, signage, marketing materials | Rs 30,000-50,000 | - |
| Staff salaries (2 people) | - | Rs 40,000-60,000 |
| DMC deposits + supplier relationships | Rs 1,00,000-2,00,000 | - |
| Marketing & lead generation | - | Rs 30,000-50,000 |
| Working capital (6 months) | Rs 3,00,000-5,00,000 | - |
| TOTAL | Rs 8-15 lakh | Rs 1-1.5 lakh |
The honest truth: Most successful agencies I know started somewhere in between. They worked from home for 6-9 months, proved the model, then moved to a small office. Don't over-invest before you have customers.
Most Profitable Niches Right Now
General travel agency is a race to the bottom. You're competing with MakeMyTrip on price, and they'll win. Here's where the money actually is:
High Margin Niches
- Honeymoon packages: Couples will pay premium for perfect. 25-35% margins achievable.
- Religious/pilgrimage tours: Char Dham, Kailash Mansarovar, temple circuits. Loyal repeat customers.
- Outbound groups (MICE): Company offsites, dealer incentives. Rs 50K-1L per person, good volumes.
- Luxury inbound: Foreign tourists paying $500+/day. High per-transaction value.
- Wildlife & eco-tourism: Safari specialists. Limited supply = pricing power.
High Volume Niches
- Singapore-Malaysia-Thailand corridor: Never stops. Focus on tier-2 city customers.
- Dubai shopping packages: Constant demand, especially around sales seasons.
- Bali honeymoons: Trendy destination, younger demographic, Instagram-driven.
- Domestic group tours: Rajasthan, Kerala, Himachal. Bus operator tie-ups = consistent volume.
- Student travel: University trips, education fairs. Annual cycle, good school tie-ups = captive market.
The Smart Play
Pick ONE niche to start. Singapore packages for families from Gujarat. Or wildlife safaris for foreign tourists. Or MICE for IT companies. Go deep before going wide. You'll build reputation faster, understand the customer better, and suppliers will take you seriously because you bring focused volume.
Building Your Supplier Network
This is where most new agencies struggle. You need rates to sell, but suppliers want volume before giving good rates. Classic chicken-and-egg. Here's how to break through:
Start With B2B Platforms
Register on these immediately—they don't require volume history:
- DMC Quote: Southeast Asia focus, good rates for Singapore/Malaysia/Thailand. Low entry barrier.
- TBO (TravelBoutique Online): India's largest B2B. Hotels, flights, activities worldwide. Deposit-based.
- Hotelbeds: Global inventory. Higher minimum but competitive rates once you're active.
- Via.com: Good for domestic hotels and budget segments.
- Yatra B2B, Cleartrip B2B: Decent flight + hotel combos.
Flight Consolidators (If Not IATA)
You don't need IATA to sell flights. Use consolidators:
- Riya Travel: Strong international routes
- Akbar Travels (Akbar Infocom): Wide network
- Via.com, TBO, Flightradar: Instant booking portals
Commission ranges from 0.5% to 3% depending on route and volume. Not huge, but flights are often loss-leaders to sell profitable hotel packages.
Direct Hotel Contracts (Month 6+)
Once you're doing 20-30 room nights per month, approach hotels directly:
- Start with 3-4 star properties (less competition from big players)
- Focus on hotels you book repeatedly via DMCs—you have leverage
- Ask for NET rates, not commission-based. Cleaner margins.
- Commit to minimum nights for better rates (e.g., 50 nights/year)
Negotiation tip: When approaching hotels, lead with "I'm bringing guests from [source market] who typically stay [X nights] and spend on [F&B/spa/etc.]". Hotels care about ancillary revenue. A guest who spends at the restaurant is worth more than a guest who just sleeps.
Technology Setup
Don't over-engineer this. I've seen agencies spend Rs 5 lakh on custom software before making their first booking. Start simple, upgrade as you grow.
Starter Stack (Rs 5,000/month)
- B2B portal logins: DMC Quote, TBO, etc. (mostly free with deposits)
- CRM: Zoho CRM free tier or HubSpot free (up to 1000 contacts)
- Accounting: Zoho Books (Rs 750/month) or Tally (Rs 18,000/year perpetual)
- Communication: WhatsApp Business (free) + Google Workspace (Rs 125/user/month)
- Quotation: Google Docs/Canva initially, then upgrade to proper tools
Growth Stack (Rs 15,000-30,000/month)
- White-label booking engine: TravelCarma, Trawex, or custom development (Rs 2-5 lakh setup + monthly)
- CRM upgrade: Zoho CRM paid or LeadSquared (travel-focused)
- AI tools: ChatGPT Team (Rs 2,000/month) for itinerary drafting, customer replies
- Marketing: Meta ads manager, Google Ads, email marketing (Mailchimp/Sendinblue)
- Analytics: Google Analytics + Data Studio dashboards
The 2026 AI angle: Agencies using AI for customer support and itinerary generation are saving 30-40% time. Worth experimenting with from day one. The tech isn't replacing agents—it's making good agents faster.
Frequently Asked Questions
Bare minimum: Rs 1.5-2 lakh for a home-based solo operation. Realistic setup with small office: Rs 5-10 lakh. Full-scale with team and MOT recognition: Rs 15-25 lakh. The wide range depends on whether you need an office, staff, and how much working capital you want as buffer. My advice: start lean (under Rs 3 lakh), prove the model, then invest more.
No, India doesn't have a mandatory travel agency license. You can legally operate with just company registration and GST. However, MOT (Ministry of Tourism) recognition is valuable for credibility and supplier relationships. Most agencies apply for MOT after their first year when they have turnover proof. GST registration is mandatory though—don't skip that.
For serious B2B operations, Private Limited is better. Suppliers and corporate clients take you more seriously, MOT applications are smoother, and future funding is easier. The extra compliance cost (Rs 10,000-15,000/year) is worth it. LLP works fine for smaller partnership-based agencies. Proprietorship is fine for testing an idea but upgrade within a year if it works.
No. Most Indian travel agencies operate successfully without IATA. Use consolidators like TBO, Riya, or Akbar for flight bookings—they give you access to airline inventory at decent margins. IATA only makes sense if you're doing very high flight volume (Rs 50L+ monthly in tickets) or serving corporate clients who specifically require IATA agents. The financial requirements (Rs 30-50 lakh in guarantees) don't make sense for most startups.
Lean home-based operations can break even in 3-4 months and profit by month 6. Agencies with offices and staff typically take 8-12 months. Key factors: your niche (some segments have faster sales cycles), your network (warm leads close faster), and how quickly you build supplier relationships. First-year target: Rs 30-50 lakh bookings with 15-20% gross margin is realistic and achievable.
Absolutely. Many successful agencies operate from home, especially in early stages. You'll save Rs 20,000-50,000/month in office costs. GST registration can be done on residential address in most states. The only issue: MOT recognition requires "proper office premises"—so you'd need to rent a small space when you apply for that. But MOT can wait until year 2. Focus on building the business first.
Ready to Start Your Travel Agency in India?
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