Why travel stocks are cheering Modi's promise to liberalise visa norms for NRIs

It’s not just NRIs in the US who are cheering for the Indian Prime Minister’s announcement that visa norms would be eased for them. The stocks of three travel companies listed on the Indianmarkets jumped on the news as investors expectthedevelopment toresult inaninflux of tourists.

Speaking in New York, Modi announced that Indian missions in the US would grant long-term visas to US citizens and tourists would get visa on arrival in India.

Online visas are to be be introduced and visa outsourcing services will be expanded to reduce current problems, the prime minister promised.

The move is expected to provide a much-neededpush forthe tourism sector, which has boosted the sentiment fortravel company stocks.

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Shares in Cox and Kings surged 8 percent, Thomas Cook rose 6.9 percentandMahindra Holidays and Resorts gained 4.3 percent despite markets largely remaining flat.

And there’s a reason why. The US is already the largest contributor to India’s tourism sector of which the non-resident Indian population is a contributor.

Here’s how much US contributed to India’s tourism as per last available official statistics for2012:

Given the steady rise in US tourists to the nation, the easier visa norms are only expected to boost their arrivals. And perhaps it explains why the travel companies are cheering today. And given India is among the highest earning among emerging economies when it comes to tourism , travel companies have every reason to cheer.