The main goal of the research was to find-out barriers of bilateral tourism flow between India and Europe from 1981 to 2011 and suggest policies to these barriers to capture these lucrative markets for the potential development of bilateral tourism flow. The methodology used in this study combined a review of the literature with an analysis of tourist flow data and limited case study analysis. Statistical tools percentage analysis, Correlation and linear regression analysis were used and comparative charts to assist in empirical analysis. As per study, the economic recession, economic growth, GDP of the country India and Europe, currency exchange rate of Euro in relation with Indian rupees, price of the tourism products, terrorism, wars between countries due to international political relation, inconvenient government policies, air service agreements (ASA), private sector participation and growth, knowledge about the tourist destinations, regional competitive disadvantage, working structure, social behavior of people, etc. factors became barriers to the bilateral tourism flow between India and Europe. There is pace of growth of inbound and outbound tourism between India and Euro.