Coastal tourism, a major sector of blue economy, presents huge potential for job creation and economic growth. Experiences of littoral countries indicate that costal tourism goes hand in hand with global tourism. Growth of coastal tourism has reached its peak in recent decades. In the EU, this segment is counted in the EU’s Blue Growth Strategy as a sector with special potential to foster smart, sustainable and inclusive Europe. It is the biggest maritime sector in terms of gross value added and employment generation. In countries like Ireland, the water-based tourism and leisure industry is quite substantial in terms of value addition and diversification. It is an outcome of a set of concerted policy measures that address the potential and constraints in promoting the marine tourism sector. Sea angling, bird watching, boating at sea, dolphin watching, scuba diving, swimming in the sea and other related activities around the sea are some of those emerging segments of coastal tourism. Hotels, motels, water sport, cruise and restaurants are potential segments for expansion and growth in the coastal tourism sector. The flora and fauna spreading over the littoral states of the Indian Ocean provides biggest opportunities for investment in the tourism sector which in turn would contribute to more robust blue economy in the region. At the same time, the adverse effects of expanded tourism activities have to be monitored regularly to optimize welfare effects stemming from the coastal tourism sector.