While the budget marks progress in recognising tourism as a vital economic driver, it highlights the need for more targeted reforms that offer sustained support and financial relief for businesses across the sector. Here’s a mix of reactions and key takeaways on tourism from the 8th Union Budget presented by Nirmala Sitharaman today.
In her presentation of the Union Budget for 2025-2026, the finance minister announced a series of initiatives aimed at driving the growth of India’s tourism sector, majorly focusing on regional connectivity, and leveraging the nation’s rich cultural and spiritual heritage. These initiatives are set to enhance the tourism landscape, leading to employment generation and stronger economic contributions from the sector. Notably, India’s economy is projected to grow between 6.3% and 6.8% in 2025-26, as per the Economic Survey for 2024-25, presented in Parliament on January 31, 2025, which further signals a favourable backdrop for the expansion of the tourism sector.
In a strategic move to boost employment within the sector, the government will collaborate with states to develop the top 50 tourist destinations in India. Performance-linked incentives for states have also been announced which will ensure accelerated development in key tourism regions.
Regional connectivity, said Sitharaman, is set to expand significantly with the UDAN scheme, aiming to connect 120 new destinations across India. This expansion is projected to carry 4 crore passengers over the next 10 years, making air travel more accessible for domestic and international tourists.
The budget also addresses the future needs of Bihar, particularly with the development of Greenfield airports and financial support for the Western Koshi Canal ERM (Eco Restoration and Management) projects, positioning the state as a major tourism hub.
To make travel easier for international tourists, the government will also introduce more streamlined e-visa facilities, making India more accessible and attractive for foreign visitors. The budget also emphasizes improving travel ease and connectivity to tourist destinations, ensuring that all parts of India, from the Himalayas to coastal areas, are easily accessible to both domestic and international visitors.
Building on last year’s focus on spiritual tourism as well as the tourism surge in key areas like Ayodhya and Prayagraj, the government is now pledging a renewed emphasis on destinations tied to the life and teachings of Lord Buddha. These sites will receive special attention to attract a global audience interested in spiritual and religious tourism. Besides spiritual, medical tourism will get a leverage as well.As part of the “Heal in India” initiative, the budget outlines plan to make India a global medical tourism hub. The government will partner with the private sector to build healthcare capacity, while relaxed visa norms will make it easier for international patients to visit India for treatment.
MUDRA Loans for Homestays have also been announced. Encouraging the growth of the homestay sector, the government will offer these loans to individuals looking to establish homestays, thereby promoting rural tourism and providing local economic opportunities.
Further, intensive skill development programs will be launched to equip the youth with skills needed for various tourism-related jobs, from hospitality to guiding services, enhancing the workforce for India’s tourism industry.
Gajendra Singh Shekhawat, Union Minister for Tourism and Culture, took to the social media platform X to welcome the government’s plan to develop the top 50 tourist destinations across the country in collaboration with states through a challenge mode. “Land for building key infra will have to be provided by the state. Hotels in these destinations will be included in the infrastructure -harmonised list,” he announced.
Besides the minister, the industry experts have shown optimism that these measures will substantially enhance the sector’s contribution to India’s economy and elevate its global tourism rankings. But some have shared their perspectives on the proposed initiatives, pointing that the budget does not address key long-standing demands from the tourism industry, such as the rationalization of taxes and granting export industry status to tourism, which remains a crucial issue for stakeholders, given the sector’s contribution to foreign exchange earnings. The industry remains hopeful that these demands will be addressed in due course.
Here are some of the initial reactions from the industry following the budget announcement:
Rajiv Mehra, President, IATO & General Secretary, FAITH
Few things are highly positive for the tourism sector, like extension of UDAN scheme for 120 new cities. This will boost connectivity and help attract more tourists to these destinations. Besides, infrastructure status to hotels in these destinations would help the Hotels get access to credit at lower rates thus helping in reducing costs. The raising of TCS exemption limit to Rs 10 lakh from Rs 7 lakh would reduce the tax, however we are awaiting fine print on this. E-visa facility to groups is also welcome.
There is no mention of rationalization of taxes and giving export industry status to Tourism industry in the union budget, which is a long pending demand of IATO based on the foreign exchange earnings. These are the old demands of IATO and we are hopeful these will be considered favourably by the GST Council.
Aashish Gupta, Consulting CEO, FAITH
The intent in the union budget is progressive and in the right direction. It covers multiple parameters under the theme of Investment in Tourism for Employment-led Growth. New Tourism destinations will emerge given the proposed Top 50 tourist destination sites in the country to be developed in partnership with states through the challenge mode. Creation of Hotel rooms supply in these destinations under inclusion under Infrastructure list can fast track supply.
The current tourism destinations can become better given the proposal that States will be given that performance-linked incentives for effective destination management
Inbound tourism can be given a stimulus given e visa waiver to special tourism groups. Medical and Buddhist tourism segments will also be likely given a boost given the enhanced support under ‘heal in India’ and destinations under Buddhism.
Alternative accommodation will also grow given the proposed mudra loans to home stays.
The proposed Udaan RCS extended to 120 destinations targeting 4 crore air travellers and covering helicopter and hill routes will boost travel pan India in main stream destinations and even remote and hill destinations. The modifications in shipbuilding should likely boost cruise tourism.
The proposed enhancement of slabs on TCS on remittance should benefit travel agents. Skilling should be given a boost given the intent announced for hotel Management institutes. The amendments in direct tax code should release more disposal funds among Indian citizens leading to enhanced spending in tourism travel and hospitality.
Pieter Elbers, CEO, IndiGo
The Union Budget 2025 has outlined various great initiatives to further develop a future-ready travel ecosystem, with emphasis on people and infrastructure, and aviation as a key enabler. Investment in developing world-class airports, enhancing regional connectivity, capacity upgrades, procedures, regulatory framework and streamlined visa facilities, will all play critical role in bringing this vision of developing India into a global aviation hub to life. By strengthening both domestic and international connectivity, we are fueling economic progress, bridging communities, and reinforcing aviation’s role as a catalyst for national growth and collectively building India as a leading global economic powerhouse.
Karan Agarwal, Director of Cox & Kings
The Union Budget 2025 takes a well-rounded approach to tourism, recognizing its potential as a key driver of economic growth and employment. The plan to develop 50 destinations and prioritize spiritual and medical tourism is a step in the right direction. Streamlining travel with e-visas and fee waivers will make India more accessible to international tourists, boosting arrivals.
The focus on public-private collaboration in developing 22 top destinations is particularly encouraging. It signals a shift towards structured, long-term growth rather than short-term measures. With the right execution, these initiatives can strengthen India’s position as a leading global tourism destination while creating significant employment opportunities across the sector.
Pradeep Shetty, spokesperson, HRAWI & Vice President, FHRAI
I am happy to see the Union Budget 2025 focus on growing India’s tourism sector. The plan to develop the top 50 tourism destinations in partnership with state governments is a major initiative. This collaboration will not only improve infrastructure but also help spread tourism across the country, attracting more visitors and benefiting local communities. Additionally, the inclusion of hotels in these destinations in the harmonious master list is a significant move. This aligns with our long-standing request for granting of Infrastructure Status to the hospitality industry. This will facilitate access to cheaper, long-term financing, enabling hotels in these newly developed destinations to upgrade their facilities and offer world-class services, further boosting the sector.
The introduction of visa fee waivers and e-visa options for certain tourist groups will make India an even more attractive destination. Simplifying the visa process will encourage more international visitors, boosting tourism and further contributing to the economy.
The government’s focus on promoting religious tourism is also noteworthy. This will help further establish India as a leading destination for religious tourism, driving both tourism revenue and cultural exchange.
The modified UDAN scheme, aimed at enhancing regional connectivity to 120 new destinations and carrying an additional 4 crore passengers over the next 10 years, will make travel more accessible to a larger number of people, driving tourism to both popular and emerging destinations and improving economic opportunities for local communities.
The introduction of Mudra loans for homestay businesses is another positive step. It will give local entrepreneurs the chance to start and grow small tourism businesses, especially in lesser-known areas. This will help create more jobs and encourage tourism in these regions.
Jyoti Mayal, Former TAAI President
The 2025 Union Budget lays a strong foundation for India’s travel and tourism industry, with some much-needed initiatives that will shape its future. Expanding the UDAN RCS scheme to 120 destinations and targeting 4 crore travellers is a crucial step in making regional connectivity more seamless, bringing previously overlooked destinations into the tourism mainstream. Developing 50 key tourism sites in partnership with states, along with granting infrastructure status to hotels in these destinations, is a progressive move that will boost investment, create jobs, and elevate the overall travel experience.
The announcement of five National Centres of Excellence for Skilling, including dedicated support for hotel management training, is a major win for the industry. Tourism thrives on people, and ensuring our workforce is equipped with world-class skills in hospitality, digital innovation, and sustainable tourism practices will significantly enhance service standards while creating more employment opportunities.
However, given the strides being made, it is a setback that critical concerns raised by travel service providers — such as restoring GST input credit, abolishing TCS, and granting industry status to tourism for tax benefits, have not been addressed. These measures are essential for improving ease of business, boosting liquidity, and ensuring the long-term sustainability of the sector.
The ₹33 crore allocation for international tourism marketing, while a significant jump from last year’s ₹3 crore, still pales in comparison to the ₹177 crore allocated for domestic tourism promotion. If we truly want to position India as a premier global travel destination, we need a stronger push in international branding and outreach.
This budget is undoubtedly a step in the right direction, reinforcing tourism’s role as a key economic driver. But to truly unlock its potential, there is a need for more industry-centric reforms that provide long-term support and financial ease for businesses across the ecosystem.
Sarbendra Sarkar, Founder & MD, Cygnett Hotels and Resorts
The Union Budget’s strategic emphasis on tourism is a welcome move that will significantly boost India’s hospitality industry. The development of 50 key destinations under challenge mode, along with streamlined e-visas and visa-free access for select tourist groups, will drive international footfall and enhance India’s global appeal. The government’s initiative to include new hotels coming up in 50 key destinations in the infrastructure harmonized list (HML) for projects where land will be provided by the state governments is a welcome step. This will help hospitality investors to avail infrastructure lending at easier terms with enhanced limits and offer access to larger amounts of funds as External Commercial Borrowings (ECBs).
Particularly, the focus on the Buddhist Circuit presents immense opportunities for hospitality expansion. With greater infrastructure and promotion around these culturally significant sites, we see strong potential to develop quality accommodations and travel experiences in these regions, catering to both domestic and international travelers.
Additionally, skill development initiatives through IHMs and financial support for homestays via Mudra loans will strengthen the sector, ensuring high-quality service and deeper community involvement in tourism growth.
Lucas Ramos, Senior Director, Travel & Membership – Asia, Pacific & India, RCI
Budget 2025 underscores the Indian government’s commitment to positioning tourism as a key pillar of economic growth, job creation, and global engagement. By developing top destinations in partnership with states, enhancing medical tourism through the ‘Heal in India’ initiative, and introducing visa reforms, India is strengthening its appeal as a world-class travel and healthcare hub. The inclusion of hotels in the harmonized scheme and visa waivers for select foreign tourists further reinforce a comprehensive, future-ready travel ecosystem. With strategic policy alignment and private sector collaboration, this budget paves the way for India to become a more accessible, competitive, and thriving global destination.
Davinder Juj, General Manager, Eros Hotel,New Delhi, Nehru Place
The provisions outlined by our esteemed Finance Minister in the Union Budget 2025 are encouraging. Her emphasis on positioning India as a spiritual destination is likely to generate increased interest among international travelers, thereby becoming a crucial driver for the growth of the travel and hospitality sectors and the broader Indian economy. The initiative to promote India as the land of Lord Buddha and Lord Ram is expected to attract Non-Resident Indians, which will promote tourism. Additionally, the focus on land acquisitions for hotel development is anticipated to draw foreign investments, further fostering growth and advancement in the sector. The reduction in visa fees to promote medical tourism is a noteworthy measure that will directly benefit hotels financially. Furthermore, an allocation of Rs 20,000 crore aimed at enhancing tourism-related employment will assist various states with prominent tourist attractions in developing infrastructure and improving connectivity. Overall the budget represents a significant impetus for attracting foreign tourists, which will, in turn, stimulate the growth of the hospitality, travel and tourism industries.
Dharamveer Singh Chouhan, Co-founder & CEO, Zostel
We appreciate the government’s continued commitment to strengthening regional tourism and connectivity in India. The plan to develop the top 50 tourism sites in collaboration with states, along with including hotels in the harmonized infrastructure list, is a significant step toward boosting the sector. Enhanced connectivity, better infrastructure, and a strong push for medical and regional tourism will make it easier for both domestic and international travelers to explore India’s hidden gems.