Traditionally known largely for its historical and cultural dimensions, tourism today is highlighted for its immense business opportunities. With its lucrative linkages with transport, hotel industry etc., the potential and performance of India’s tourism industry needs to be gauge in terms of its socio-economic magnitudes. This paper also traces the progress made by India’s tourism industry in the planning era, and the emerging issues (like alternative tourism) under globalization. It also examines the problems and challenges of the country as well as the pitfalls in tourism planning in India. The paper also makes some policy suggestions to address the constraints in promoting sustainable tourism in India.