This study attempts to investigate trends of foreign investment in India’s tourism industry on the basis of data on past trends and pattern of FDI flows in this sector. Research adopts both qualitative and quantitative approach on the basis of different secondary sources such as reports, articles, tourism and travel reports, tourism ministries publications to study trends in tourism industry. Then, Granger Causality test is used to study the causal relationship between India’s economic growth and FDI in tourism sector. Time series analysis techniques and Linear regression model are used to establish relation between FDI flows in Indian tourism and identify independent factors. For time series analysis, stationarity is tested by applying ADF unit root test. Regression assumptions are also tested and appropriate regression model was fitted using Eviews statistical software. Factors impacting FDI inflows in tourism industry are studied by using regression analysis on the basis of identified independent variables. Results reveal that the Government individual spending and inflation have a key role in impacting FDI inflows positively. While other factors like total tourist visits, exchange rate, GDP contribution of Tourism and Per Capita GDP have an insignificant impact but cannot be altogether ignored and are of significance when taken together. The existing trend and inflows in tourism sector are not encouraging enough thus require much needed effort in direction of promoting India as an investment destination for foreign investors. Authors findings are interesting as they indicates the Govt’s spending are important contributors among other factors and hence, to encourage tourism should support through infrastructural development and strategic planning