The Union Budget 2026-27 has arrived as a defining "growth connector" for India’s travel and hospitality landscape. Delivering on a key industry demand, Finance Minister Nirmala Sitharaman has moved to slash the Tax Collected at Source (TCS) on overseas tour packages to a flat 2%, a move set to unlock immediate liquidity for travelers and a massive surge in outbound bookings.
Beyond tax relief, the Budget pivots toward professionalising the sector with the landmark announcement of a National Institute of Hospitality and a strategic focus on destination-led tourism—from the Northeast’s trekking trails to the heritage corridors of Gujarat. While the quest for comprehensive infrastructure status continues, the government’s record INR 12.2 lakh crore capital expenditure and the rollout of seven high-speed rail corridors provide the structural backbone needed to transform India into a global tourism powerhouse.
What does the Union Budget 2026-2027 offer to the travel and Hospitality industry?
Union Finance Minister Nirmala Sitharaman began her Budget Speech for the Union Budget 2026-27 on Sunday, February 1, at 11 am. The Budget, is Sitharaman’s record ninth one consecutively. While the travel, tourism and hospitality industry had a lot of Pre-Budget expectations from the budget, read on to find out about their post Budget reaction.
Focus on regional connectivity and destination development
Rajesh Magow, Chair, FICCI Tourism Committee and Co-founder & Group CEO, MakeMyTrip says: “The Budget reinforces the government’s sustained focus on travel and tourism as a long-term growth driver. The rationalisation of TCS on overseas tour packages is a welcome step that addresses upfront liquidity impact on Indian outbound travellers. The government’s infrastructure-led investments have played an important role in supporting the growth of domestic tourism, and it is encouraging to see this momentum being sustained. Continued focus on regional connectivity and destination development, along with an emphasis on skilling and the creation of a national digital repository for destinations, will help improve destination discovery and enhance the overall traveller experience.”
Emphasis on skill development, heritage, and ecotourism
Aditya Pande, Group Chief Executive Officer, InterGlobe Enterprises says: “The Union Budget outlines a strong, forward-looking roadmap toward a Viksit Bharat by 2047. We welcome the government’s continued focus on strengthening India’s travel, tourism, and hospitality ecosystem through improved connectivity, accessibility, and destination infrastructure. The emphasis on skill development, heritage, and ecotourism reflects a deep understanding of the sector’s economic potential. These measures will boost demand, support local economies, and strengthen India’s position as a global hub for high-quality hospitality and travel.”
Marketing India overseas that can translate this intent into tangible outcomes
KB Kachru, President, Hotel Association of India (HAI) and Chairman – South Asia, Radisson Hotel Group says: “Budget 2026-27 reflects a strong focus on accelerating and sustaining economic growth, with a decisive push on infrastructure- both critical drivers for the tourism sector, where growth is closely linked to these factors. The renewed emphasis on the services sector, coupled with the recognition of tourism’s potential to generate employment, boost foreign exchange earnings, and expand local economies, is particularly encouraging.
The Budget’s proposals, including the National Institute of Hospitality, aim to strengthen industry-aligned skilling, research, and leadership development. Infrastructure growth in Tier 2–3 cities, the East Coast Tourism Corridor, and importantly focus on medical-value tourism, are expected to boost hotel viability, diversify India’s offerings, and enhance global competitiveness. Content-creator labs will further amplify India’s tourism story. Industry-specific measures, including the development of new tourist experiences and their enhancement through technology, such as the establishment of the National Destination Digital Knowledge Grid, further signal a forward-looking approach.
Despite the Budget’s positive thrust, a long-standing aspiration of the sector, comprehensive infrastructure recognition, remains unmet. Realizing the sector’s true potential requires key structural reforms: expanding infrastructure recognition beyond the currently designated destinations to ensure equitable access to capital, placing tourism on the concurrent list to strengthen Centre-state policy coordination, and rationalizing GST to enhance competitiveness. These enablers will amplify the impact of current initiatives and provide a strong foundation for sustainable, long-term growth across the tourism sector.
Given the government’s clear commitment to the sector, we look forward to engaging in post-budget discussions on sector specific policies including Marketing India overseas that can translate this intent into tangible outcomes.
HAI remains dedicated to supporting the government’s vision of expanding the tourism economy to 10% of GDP by 2047, and ideally, achieving this milestone even sooner.”
Comprehensive infrastructure status to the sector continues to remain a distant dream
Shwetank Singh, MD & CEO, Chalet Hotels Ltd, says: “The Union Budget 2026 represents a significant commitment to elevating India's tourism and hospitality ecosystem, and we are genuinely encouraged by the Finance Minister's comprehensive vision for the sector. The upgrade of NCHMCT into a National Institute of Hospitality is transformative: it will create a world-class talent pipeline that bridges industry needs with academic excellence, directly addressing the skilled manpower requirements of our expanding sector.
The national digital destination registry and upgrade of 15 archaeological sites into cultural destinations demonstrate a sophisticated understanding of experiential tourism infrastructure. These initiatives, combined with ecologically sustainable mountain trail development, position India to capture diverse tourism segments from heritage to adventure to wellness.
However, our long standing ask to grant comprehensive infrastructure status to the sector continues to remain a distant dream.
The sector remains focused on three priorities that will unlock exponential scale: comprehensive infrastructure status recognition beyond the current 50 destinations to enable equitable capital access across all hospitality projects; placement of tourism in the concurrent list to strengthen Centre-state policy coordination; and GST rationalization to enhance competitiveness. With India targeting a $1 trillion GDP contribution from services and 64 million jobs by 2035, these structural enablers will amplify the impact of today's programmatic investments.
Emphasis on cultural and experiential travel
Karan Agarwal, Director, Cox & Kings, on the impact of Budget 2026 adds:
“What stood out for me in this Budget is that it doesn’t treat travel as a one-sided story. Outbound travel needed a course correction, and cutting TCS on foreign tour packages to 2% does exactly that, it takes away a friction that travellers were feeling every time they planned a trip. On the inbound side, the intent is clearly longer-term. What stands out is the emphasis on cultural and experiential travel, whether through developing archaeological sites, strengthening Buddhist circuits, or building skilled local guide networks, tells us the focus is finally shifting to how India is experienced, not just how many people arrive. If this is executed well, it could move Indian tourism from being crowded and transactional to curated and experience-led.”
More efforts are needed to attract international travellers
Pushan Sharma, Director, Crisil Intelligence adds: “The Budget outlines a three-pillar support strategy for the tourism sector: theme-based offerings such as medical value tourism, trekking and Buddhist circuits; skill development for guides, healthcare workers and other stakeholders; and investment in infrastructure such as seaplanes and high-speed rail.
While the Budget allocates INR 2,153.5 crore for fiscal 2027 on PRASHAD, Swadesh Darshan, and domestic and overseas advertising expenditure, the achievement for fiscal 2026 stands at only 33%. Additionally, the promotional budget for both domestic and international tourism is only INR 3.5 crore, compared with INR 542 crore in 2019. This indicates that more efforts are needed to attract international travellers, especially when compared with peers such as Vietnam, the Philippines, Thailand, Georgia and Azerbaijan. It is crucial to improve foreign tourist arrivals, which stood at 81% of the pre-pandemic level as of 9MCY2025, with tourism accounting for 5.2% of India’s gross domestic product as of fiscal 2024 and 13.3% of employment as of H1FY2026
No major announcements for affordable housing
Anuj Puri, Chairman – ANAROCK Group adds: “Union Budget 2026-27 focused on sustained economic growth, infrastructure development, MSMEs, tourism, high-speed rail corridors, and manufacturing. From a real estate perspective, it has delivered limited direct but various indirect benefits - acting more as a growth catalyst than an instant rescue cavalry.
One major disappointment for the real estate sector was that there were no major announcements for affordable housing, which has been in free fall since the pandemic. ANAROCK data indicates that the sales share of affordable housing plummeted after the pandemic - from over 38% in 2019 to 26% in 2022 to just around 18% in 2025.
The affordable housing segment was in express need of direct intervention by way of interest stimulants for buyers and developers of affordable housing. The segment needed high-impact measures.
That said, there were some highlights:
- The increase in Public Capex from INR 11.2 lakh crore in FY 2026 to INR 12.2 lakh crore in the new fiscal 2027, with a sharp infrastructure development focus on in Tier 2 and 3 cities, can revive real estate demand and development across these cities.
- Dedicated REITs to recycle Central Public Sector Enterprise (CPSE) assets targets INR 10 lakh crore assets among railway properties, port land, power transmission infrastructure, telecom towers, government properties. The objective is to attract institutional capital without surrendering control over these assets and generate recurring revenue for CPSEs. This supports industry demands for simplified REIT taxation and expanded participation of small/medium REITs. It will deepen institutional capital in Indian real estate infrastructure. However, we must await subsequent policy circulars for a more detailed framework.
- INR 20,000 crore over 5 years for scaling Carbon Capture, Utilisation and Storage (CCUS) across power, steel, cement, refineries, and chemicals will boost sustainable real estate demand. Lower-carbon cement and steel production reduces the carbon impact of construction materials. Developers using CCUS-produced materials can achieve better ESG ratings, attract more ESG-focused institutional capital, and meet emerging green building standards. We will see a higher demand for net-zero certified buildings, and it also lowers sustainability compliance costs. This will result in premium pricing in the hospitality, commercial, and residential segments.
- The tax holiday for data centres till 2047 will boost DC demand. Also, the clause to provide services to Indian market through a local entity will generate more employment. Tier 1 cities like Chennai, Mumbai and Bangalore will see renewed interest from data centre players. Also, tier 2 cities like Jaipur and Vijayawada will very likely see more traction in this segment.
- The INR 300-crore safe harbour threshold expansion provides tax certainty, though its impact on commercial real estate will be modest. We may see a 5–10% incremental uptake in the existing IT hubs of Bangalore, Hyderabad, Pune.
- The new Dedicated Freight Corridor, 7 high-speed rail corridors and sustainable corridors will boost overall development in and around the impacted areas.
This Budget is capex-driven, asset-centric, and structurally pro-investment, with clear financial commitments to MSMEs, manufacturing, technology, biopharma and the green transition. REIT-led monetisation of CPSE commercial assets, long-term policy backing for data centres, focused development of temple towns, and a clear push for Tier-2 and Tier-3 commercial growth together reinforce confidence in real assets, hospitality, and urban expansion.
However, the absence of any direct announcement on affordable housing - particularly around definition reset or fiscal support - is a disappointment, given its importance for urban housing supply and inclusive growth.”
Setting up of a National Institute of Hospitality
Nikhil Sharma, Managing Director and COO, South Asia, Radisson Hotel Group adds: “We welcome the Union Budget 2026–27, which lays the foundation for hospitality and tourism to scale responsibly across India while reinforcing the sector’s role in employment generation and regional economic growth. The renewed focus on strengthening last-mile infrastructure, expanding rail connectivity, and promoting destination-led tourism beyond major metropolitan centres creates a strong foundation for expanding tourism into new growth markets.
The focus on sustainable and experiential tourism, including the development of Himalayan trails, the continued push for Buddhist circuits, and the strong policy thrust on the Northeast, will support the growth of diverse tourism segments while enabling more balanced regional development. These measures are expected to encourage longer stays, wider travel dispersal, and stronger demand for quality accommodation and services across tier-2 and tier-3 markets.
One of the key initiatives is the announcement to set up a National Institute of Hospitality and strengthen the Council for Hotel Management, recognising that skilling will be critical to the sector’s long-term sustainability. The hospitality industry has been reinforcing its talent pipelines through structured training programmes, partnerships with hospitality institutes, and focused efforts to build local capabilities.
Overall, the Budget’s integrated approach to infrastructure, destination development, and skill-building creates a positive environment for tourism and hospitality to scale responsibly. Radisson Hotel Group’s expansion across emerging destinations, including the Northeast, and its continued investment in skill development are closely aligned with this direction, supporting the creation of sustainable jobs and resilient tourism ecosystems."
Emphasis on deep-tech R&D through national missions
Naman Pushp, Founder & CEO, Airbound adds: “This Budget sends a clear signal that India wants to build and own emerging technologies, not just adopt them. The continued emphasis on deep-tech R&D through national missions, along with long-term innovation funding, is an important step toward backing hard, frontier problems that take years to solve.
What stands out is the system-level approach. A horizontal push on manufacturing depth, duty rationalisation across critical inputs, stronger MSME liquidity, and sustained public capex together improve the base conditions required to build complex hardware in India. These may not be sector-specific yet, but they strengthen the industrial foundation that advanced technologies depend on.
At the same time, leadership in sectors like autonomous aviation and drone-led logistics will ultimately depend on how quickly this intent translates into execution. Particularly sustained R&D funding, targeted capex support for advanced manufacturing, specialised testing infrastructure, and access to global talent. If those pieces come together, India has a real opportunity to move from participating in these sectors to defining global standards over the coming decade.”
Travel sector as a practical engine for jobs, skills
Gaurav Malik, Country Director, Indian Subcontinent & Indian Ocean Islands at Agoda adds: “Agoda welcomes the Union Budget and congratulates the Government on placing travel and tourism firmly within India’s next phase of growth. The Budget recognises the travel sector as a practical engine for jobs, skills, and regional participation, while responding to how traveller preferences are changing across the country.
The focus on capability-building and destination readiness stands out. Measures such as setting up a National Institute of Hospitality, upskilling guides at iconic sites, and creating a National Destination Digital Knowledge Grid show a holistic approach that combines talent, technology, and storytelling. At the same time, investments in experiential destinations, sustainable nature-based trails, cultural sites, and global wildlife engagement reflect a clear intent to broaden travel beyond large cities and enable year-round demand across emerging destinations.
Overall, the Budget sends a clear message that tourism plays a role not only in economic expansion, but also in shaping how people explore India and the world. Agoda looks forward to supporting this momentum by improving discovery, choice, and booking ease for travellers as travel across India becomes broader and more experience led.”
Timely opportunity to build India’s tourism advantage
Anil Chadha, Managing Director, ITC Hotels Limited says: “The Budget’s renewed focus on tourism is a strong vote of confidence in an industry that creates livelihoods at scale, supporting local entrepreneurs, artisans, and communities across the tourism value chain. The proposed upgradation of National IHMs and the NCHMT (National Council for Hotel Management and Catering Technology), alongside structured guide skilling initiatives, will significantly strengthen service quality and global competitiveness in hospitality. The emphasis on medical tourism further positions India as a trusted destination combining care, capability and hospitality. Equally transformative is the push towards a digital and AI-enabled tourism knowledge framework, which will enhance discoverability, planning and destination management. The Budget’s ‘Growth Connectors’—seven high speed rail corridors will enhance connectivity between western, southern & eastern parts of the country. The focus on adventure tourism including trekking, hiking and wildlife trails along with development of Buddhist circuits across North-East states highlights the importance of responsible, experience-led growth that protects the very destinations travellers seek. Together, these measures present a timely opportunity to build India’s tourism advantage on quality, authenticity and sustainability.”
“The Union Budget 2026–27 sends a strong and reassuring signal for India’s long-term growth, anchored in fiscal discipline and a sustained push on infrastructure-led development. The continued emphasis on capital expenditure and destination-focused investment provides a solid structural framework for the expansion of tourism and, by extension, the civil aviation sector.
Strengthening medical value tourism and destination development
Aloke Singh, Managing Director, Air India Express adds: “The Budget’s focus on strengthening medical value tourism and destination development is particularly relevant for aviation, as it creates high-frequency, purpose-driven inbound travel, especially from regions such as the Middle East and Southeast Asia. At the same time, the emphasis on developing heritage, archaeological, and eco-tourism destinations across multiple states will stimulate demand for air connectivity to Tier-2 and Tier-3 cities, supporting the next phase of domestic aviation growth.
Importantly, the parallel focus on skilling and professionalising the hospitality and tourism workforce addresses the capacity and service-quality requirements needed to sustain this growth. Taken together, these measures create an ecosystem in which airlines like Air India Express are well positioned to play a meaningful role.”
Empowering the next generation to showcase India’s heritage through innovative digital content
Sakshi Sawant, Owner of Maati Nature Resort adds: “Strengthening waterways will make travel more accessible and enjoyable, supporting local economies. Recognizing the role of youth in the creative economy, the finance minister also unveiled a major creative-skills initiative, establishing content creation labs in 1,500 schools and 500 colleges nationwide. The initiative aims to nurture young storytellers who will actively promote India’s tourism narrative, both domestically and globally. “This programme will empower the next generation to showcase India’s heritage through innovative digital content,” added Sawant, welcoming the move.
With these initiatives, Budget 2026 sets the stage for a dynamic growth trajectory in tourism, combining sustainable travel, skill development, and digital storytelling to strengthen India’s position as a leading travel destination, opined Sawant.
Rationalising the TCS rate welcome
Gagan Malhotra, COO, BookMyForex.com says: “We welcome the government’s decision to rationalize the TCS rate on foreign remittances for education-related expenses from 5% to 2% in the Union Budget 2026. This is a progressive step that will ease the financial burden on Indian families supporting overseas education aspirations.
Extending the same relief to medical remittances provides meaningful support to families managing healthcare needs abroad.”
Creation of a National Destination Digital Knowledge Grid
Manju Sharma, Managing Director, Jaypee Hotel and Resorts adds: “The Union Budget 2026 clearly recognises tourism and hospitality as key drivers of employment, foreign exchange, and regional growth. The proposed National Institute of Hospitality, through the upgradation of NCHMCT, will significantly strengthen talent development and service excellence across the sector. The pilot upskilling programme for tourist guides is a timely move towards delivering consistent, high-quality experiences at India’s most iconic destinations
The creation of a National Destination Digital Knowledge Grid is a particularly forward-looking step, combining heritage preservation with digital enablement and opening new avenues for research, content creation, and destination storytelling. The focus on sustainable nature and eco-tourism across trekking, wildlife, birding, and coastal trails demonstrates a balanced approach that aligns tourism growth with environmental responsibility
For experience-led hospitality groups such as Jaypee Hotels & Resorts, these measures will support deeper destination development, higher service standards, and more immersive guest experiences - reinforcing India’s position as a globally competitive tourism destination”
Digital destination platforms and creator-led promotion signal a modern, data-driven approach
Sarbendra Sarkar, Managing Director & Founder, Cygnett Hotels & Resorts adds: “Budget 2026 presents a comprehensive and future-ready vision for tourism and hospitality, placing India firmly on a high-growth trajectory. The focus on building a world-class hospitality talent hub, along with professional guide training, will significantly raise service standards and create a skilled workforce capable of delivering globally benchmarked experiences. Digital destination platforms and creator-led promotion signal a modern, data-driven approach to tourism marketing that will enhance visibility and demand across regions.
The reduction of TCS on overseas tour packages to 2 percent is a welcome move that improves travel affordability and sentiment, while the rollout of green high-speed rail corridors will redefine inter-city mobility. Faster, sustainable rail connectivity will encourage shorter, more frequent trips and unlock new demand for city and regional hospitality. Enhanced last-mile access through initiatives such as seaplane connectivity further strengthens destination reach.
Equally impactful is the emphasis on eco-friendly mountain trails, heritage site revitalisation, Buddhist circuits and Purvodaya-led tourism development. These initiatives balance conservation with livelihood creation and help diversify tourism beyond traditional markets. The growing focus on medical tourism further positions India as a competitive global destination.
For Cygnett Hotels and Resorts, this integrated policy push creates a strong foundation for expansion across business, leisure and emerging destinations. Budget 2026 reinforces confidence in India’s tourism growth story, driven by connectivity, capability and conscious development.”
High-speed connectivity and curated adventure tourism
Sumit Mitruka, Founder & CEO, Summit Hotels & Resorts adds: “Improved high-speed rail connectivity to Siliguri is a landmark step for the Northeast, with the potential to fundamentally reshape how the region is discovered and experienced. Though bullet train, faster and more reliable access will reduce travel fatigue, encourage longer stays, and make destinations across Sikkim, North Bengal and the wider Northeast more attractive for both domestic and international travellers. For the hospitality sector, this means stronger seasonality balance, improved viability for off-beat locations, and greater confidence for long-term investment in responsible tourism infrastructure.
Equally significant is the announcement around the development of new trekking routes. The Northeast has some of India’s most pristine landscapes, but much of this potential has remained untapped due to limited access and fragmented planning. Structured trekking corridors, developed with safety, sustainability and local participation at the core, can unlock high-value experiential tourism while preserving ecological integrity. Well-planned trails will generate livelihoods for local guides, porters and homestay owners, while also dispersing tourist footfall beyond a few overcrowded destinations.
Together, high-speed connectivity and curated adventure tourism create a powerful ecosystem, one that supports regional economies, promotes cultural exchange, and positions the Northeast as a year-round experiential destination rather than a seasonal getaway.”
Faster connectivity and shorter travel cycles
Ritwik Khare, Founder and CEO of ELIVAAS says: “Budget 2026 outlines a strong, growth-driven vision for tourism and hospitality, with infrastructure, mobility and affordability working together to expand demand. The announcement of seven high-speed rail corridors is particularly significant, as faster rail connectivity will fundamentally change how travellers plan their trips. Reduced travel time encourages more frequent, shorter holidays and makes weekend and mid-week leisure travel far more viable across regions. High-speed rail also offers a cost-effective alternative to air travel, opening the market to a wider customer base that values speed without premium pricing.
The reduction in overseas tour package TCS from 5 percent to 2 percent is another positive step, as it improves overall travel sentiment and disposable spending, indirectly benefiting domestic hospitality as travellers balance international and local experiences. Combined with improved infrastructure and destination development, these measures will increase travel velocity and diversify travel patterns beyond peak seasons.
For ELIVAAS, this creates meaningful opportunities. Faster connectivity and shorter travel cycles align well with the growing preference for private, well-managed villas and flexible stay formats. Guests seeking quick, high-quality getaways will increasingly look for trusted accommodation options that offer comfort, privacy and curated experiences. Budget 2026 strengthens the ecosystem needed to support this shift, enabling sustained demand growth, wider geographic expansion and a more resilient, experience-led hospitality market.”
Upgrading Indus Valley Civilisation sites like Dholavira and Lothal
Bhavik Sheth, Chief Operating Officer (COO), Evoke Experiences adds: “From a Gujarat lens, the post-Budget focus on upgrading Indus Valley Civilisation sites like Dholavira and Lothal is a powerful step towards positioning the state as a global heritage destination. These sites are not just archaeological landmarks; they are living narratives of India’s 5,000-year-old urban intelligence, sustainability practices and civic planning. Structured investment in interpretation centres, visitor infrastructure and storytelling will allow global travellers to engage more meaningfully with this legacy, rather than experiencing it as static ruins.
For experiential hospitality brands like us, this opens up opportunities to curate immersive journeys that blend history, landscape and local communities, from guided archaeological walks and cultural immersions to responsible stays that benefit nearby regions. Gujarat has long had strong cultural assets; this announcement elevates its historical depth on the global stage. If executed thoughtfully, the upgrade of Dholavira and Lothal can redefine heritage tourism in India, moving it towards education-led, experience-driven and globally benchmarked offerings.”
Connectivity in Tier-2 and Tier-3 regions
Aditya Chamaria, Managing Director, Damodar Ropeways & Infra Limited says: “The Union Budget 2026 reinforces the government’s long-term vision of building inclusive, experience-led infrastructure across India. The continued push on capital expenditure, connectivity in Tier-2 and Tier-3 regions, and focus on tourism-linked infrastructure will significantly benefit ropeway and mobility projects. Ropeways play a crucial role in enhancing access to major tourist destinations and pilgrimage sites, especially temples located in hilly and high-footfall regions. With improved connectivity, safety, and crowd management, this Budget will support sustainable tourism growth and make temple tourism more accessible for elderly devotees and families.”
Pilot scheme to upskill 10,000 guides across 20 tourist sites
Reema Diwan is Vice President - Design & Technical Services at Accor India & South Asia adds: “We warmly welcome the Union Budget 2026-27 for its decisive push to strengthen tourism, hospitality and medical tourism as drivers of jobs and economic growth. The upgrade of the National Council for Hotel Management and Catering Technology into a National Institute of Hospitality is a major step towards building a stronger talent pipeline and closer collaboration between academia, industry and government.
The pilot scheme to upskill 10,000 guides across 20 tourist sites through a standardised, high-quality 12-week hybrid programme, along with the National Destination Digital Knowledge Grid, will elevate visitor experience while creating new opportunities for local researchers, historians, content creators and technology partners. The development of 15 archaeological sites into experiential cultural destinations and the launch of Buddhist Circuits in the North-Eastern states will further strengthen heritage and spiritual tourism.
We also welcome the reduction in TCS on overseas tour packages to 2%, and lower TCS for education and medical remittances, which will ease travel-related spending. Incentives for indigenising seaplane manufacturing will boost last-mile and remote connectivity, while the plan to establish five Regional Medical Hubs, with integrated healthcare and AYUSH facilities, reinforces India’s ambition to become a global medical tourism hub and a generator of high-quality jobs.”
Integrating AI to upskill young professionals, guides, content creators
Rahul Borude, Co-founder CEO, StampMyVIsa adds: “'The Budget 2026 built a strong focus on developing India as a tourist destination for the world and even domestic travelers because given our heritage and culture, all the right ingredients to develop iconic tourist destinations is a great opportunity and it will benefit the stakeholders of the travel and hospitality industry.
The Budget has unlocked the demand side surge by reducing TCS on the overseas tour packages, as the outbound travel from India has been consistently growing. The govt is not just stopping at that, with the several announcements on integrating AI to upskill young professionals, guides, content creators and more will directly impact that tourism sector and will also lead to employment opportunities.
Announcement regarding setting up of National Institute of Hospitality and the pilot programme to upskill 10,000 guides is a strong indication that the entire industry should standardise its service delivery to improve tourists' experiences.
Simplifying travel processes, ensuring industry-led skilling, and keeping digital platforms open and interoperable.
The direction is right; the next phase must focus on scale, quality, and seamless execution'
Budget 2026-27 firmly establishes India as a high-value global care hub
Aalap Bansal Partner G&PS, Industrial & Infrastructure Development Advisory and Lead- Tourism, Sports and Leisure, KPMG in India says:
Medical Value Tourism: Budget 2026-27 firmly establishes India as a high-value global care hub. By focusing on Medical Tourism, the government recognizes healthcare as a dual engine for economic growth and skilled employment. This creates a robust 'care economy' corridor, integrating clinical excellence with world-class hospitality to drive sustainable international demand.
Integration of a 'National Destination Digital Knowledge Grid' with tangible infrastructure
Tourism: Budget 2026-27 signals a shift to 'experience management.' By curating 15 iconic archaeological sites and Buddhist circuits as immersive cultural hubs, the government is unlocking the high-yield potential of India’s civilizational assets.This isn't just about footfall; it's about value capture. The integration of a 'National Destination Digital Knowledge Grid' with tangible infrastructure—like the new Seaplane VGF scheme and sustainable trekking corridors—creates a premium ecosystem. We are moving towards an era where India’s 'Orange Economy' and heritage sectors become significant employment engines for local communities.
Balanced direction for how travel can grow
Siddhartha Gupta, CEO, Yatra Online Limited, adds: “India’s travel and tourism sector has reached a point where demand is well established across segments and geographies. The focus now has to be on building an ecosystem that allows this demand to scale in a more efficient, affordable, and predictable way, and the Union Budget 2026-27 takes steps in that direction.
A continued push on connectivity and planned urban development will make inter-city travel more reliable and bring Tier-2 and Tier-3 cities further into the mainstream of both business and leisure travel. For platforms like Yatra, this creates a stronger base for corporate travel, MICE and long-stay demand beyond the largest metros.
The reduction of TCS on overseas tour packages to 2% without any value threshold is a practical and welcome reform. By lowering the upfront cash outgo and simplifying the structure, it improves liquidity for travelers and removes a long-standing friction point in outbound travel planning, which should support healthier and more consistent demand.
It is encouraging to see tourism being viewed through the lens of employment, foreign exchange, and local economic development. Overall, the Budget provides a clear and balanced direction for how travel can grow responsibly strengthening connectivity, improving affordability, and creating the conditions for the industry to deliver lasting economic and employment impact”
Budget will help tourism beyond metros, attract investment, generate lakhs of jobs
Surendra Kumar Jaiswal, President, FHRAI says: “It is encouraging that tourism has finally come into the government’s agenda as a key pillar of employment and economic growth in the Union Budget 2026 -27. Placing tourism at the centre of the growth strategy in the Union Budget—linking it directly to job creation, foreign exchange earnings and local economic development—is a long-awaited shift. The emphasis on cultural, spiritual, heritage and medical value tourism, skilling, nurturing young storytellers, destination development, and last-mile connectivity can unlock India’s true potential as a global tourism hub.
The proposal to create a National Institute of Hospitality and work closely with academia and industry is a timely step towards strengthening skills and service standards. The pilot initiative to upskill 10,000 guides across 20 iconic tourist sites through a structured 12-week hybrid programme reflects a welcome focus on quality, professionalism, and employability.
The creation of a national cultural destination digital knowledge grid, along with the development of sustainable mountain trails in Himachal Pradesh, Uttarakhand and Jammu & Kashmir, and wildlife tourism circuits such as turtle nesting trails in Odisha, Karnataka and Kerala, and bird-watching trails around Pulicat Lake, signals a clear intent to promote responsible and experiential tourism. Further the proposal to upgrade 15 archaeological sites into major cultural hubs will strengthen India’s heritage tourism ecosystem. The lowering of TCS to 2% is again a welcome move.
The budget announcements certainly put Tourism at the Government's agenda. The budget has really shown the Government’s intent to promote Tourism as a sector to derive overall socioeconomic growth. On behalf of FHRAI, I commend the budget as it focuses on creating new tourism related economic zones in cities, high speed train corridor, development of 20 national waterways, and improvement of infrastructure in Tier 2 & 3 cities. These initiatives will help spread tourism beyond metros, attract investment, generate lakhs of jobs and bring in billions in foreign exchange.”
TCS regime enhances affordability, payment comfort, and booking visibility
Poonam Upadhyay, Director, Crisil Ratings says: The rationalisation of TCS on overseas tour packages from a two-tier structure of 5%/20% to a flat 2% meaningfully reduces upfront cash outgo burden for travellers, improving booking propensity for organised travel companies’ outbound businesses. This comes at a time of strong overseas travel momentum, with Indian departures at ~3.1 crore in 2024, and early 2025 trends tracking high-single-digit to low-double-digit growth. The simplified TCS regime enhances affordability, payment comfort, and booking visibility supporting sustained growth in outbound travel businesses.
Crisil Ratings expects nearly two-thirds of the 20,000 new branded rooms to come up in tier 2/3 leisure destinations
Mohit Makhija, Senior Director, Crisil Ratings on Hotels adds: “Budget 2026 announcements related to development of new tourist destinations and emphasis on creating novel experiences is positive for the hospitality sector. Creation of five new tourism destinations in eastern India, a Buddhist circuit in the North-East and promoting eco-tourism will expand India's tourism landscape. These measures will create a more resilient and regionally balanced growth opportunity for the hospitality industry over the medium term. Crisil Ratings expects nearly two-thirds of the 20,000 new branded rooms to come up in tier 2/3 leisure destinations and spiritual hotspots next fiscal.”
Strengthening industry-relevant training and encouraging participation across diverse ability groups
Arjun Toor, Co-Founder, RollsKing. Says: ''The Union Budget focus on skilling, employment generation, and inclusive growth is a positive step for labour-intensive sectors such as Hospitality, QSR and Food & Beverages. With focused transformation, we are hopeful these sectors will offer task-oriented and process-driven roles, making them well suited to create dignified livelihood opportunities for Divyangjans through customized and role-specific training. Additionally, the focus on hospitality education, destination-led tourism, and improved infrastructure will drive consumption across dine-in and delivery formats, while GST rationalisation remains a key industry expectation. By strengthening industry-relevant training and encouraging participation across diverse ability groups, the Budget can enable sustainable job creation and create a supportive environment to scale responsibly, especially in emerging Tier-2 and Tier-3 cities.''
Emerging connectivity like seaplanes
Manjari Singhal, Chief Growth and Business Officer, Cleartrip adds: “The Union Budget 2026 signals a clear and consistent commitment to strengthening India’s travel and tourism ecosystem. Continued investments in building an integrated network of roads, railways, airports and emerging connectivity like seaplanes will make travel easier, more accessible and better distributed, supporting the next phase of both domestic and inbound tourism growth.
As infrastructure improves access and connectivity, these efforts help travellers feel more confident to explore new regions and experiences. Overall, the Budget reinforces travel and tourism as long-term drivers of jobs, regional development and inclusive growth, and sets the right foundation for India’s inbound and outbound travel story in the years ahead."
Intent to use tourism and hospitality as levers for balanced economic growth
Manoj Bhat, Managing Director & CEO of Mahindra Holidays & Resorts India Ltd. Adds: “The Union Budget 2026 reinforces the government’s intent to use tourism and hospitality as levers for balanced economic growth rather than treating them as standalone consumption sectors. The focus on destination development beyond metros, improved physical connectivity, and a sharper push on spiritual and heritage circuits reflects a recognition that tourism growth must be geographically distributed and locally rooted.
Equally important is the emphasis on skilling and workforce development. As the sector expands into tier two and three markets, the availability of trained talent will determine not just service quality but the sustainability of growth itself. By linking infrastructure creation with human capital development, the Budget moves the conversation from short-term demand creation to building a resilient, employment-generating tourism ecosystem.”
Shift towards experience-led tourism, spanning archaeological and heritage sites
Samir MC, CEO, Tamara Leisure Experiences, says: “This Budget lays out a coherent, long-term blueprint to take India’s hospitality and tourism sector decisively onto the global stage. By strengthening institutional capability through a National Institute of Hospitality, envisioned as a bridge between academia, industry, and government, alongside a clear emphasis on skilling and connectivity, it creates a strong foundation for sustainable sectoral growth.
Particularly encouraging is the shift towards experience-led tourism, spanning archaeological and heritage sites, spiritual and Buddhist circuits, temple towns, and nature-based destinations across emerging regions. The focus on immersive storytelling, destination-led infrastructure, and development beyond metros reflects an approach aligned with building responsible hospitality destinations that are rooted in place, culture, and community. With improved regional and last-mile connectivity, greener mobility solutions, streamlined clearances, and targeted support for Tier II and Tier III cities as growth engines, the ecosystem is becoming more conducive to long-term, responsible growth.
Lastly, the emphasis on regional medical hubs and integrated wellness and AYUSH ecosystems further strengthens India’s appeal as a holistic destination, expanding the scope of tourism beyond leisure into healthcare-led, high-value travel. For us, this Budget closely mirrors the long-term vision we have always believed is essential for building meaningful hospitality destinations.”
Emphasis on private sector participation and strengthening healthcare capacity
Shaaz Mehmood, Founder, Medijourn Solutions Private Limited adds: “I commend Finance Minister Nirmala Sitharaman on the Union Budget 2026–27 for recognising the strategic importance of medical tourism in India’s healthcare growth story. The announcement of five regional medical tourism hubs is a strong and timely step that will enhance India’s position as a global medical value travel destination. By integrating modern healthcare with AYUSH systems, diagnostics and rehabilitation, the budget lays the foundation for a more coordinated and patient-centric ecosystem. The emphasis on private sector participation and strengthening healthcare capacity will improve service delivery and scalability. While further policy support over time can accelerate global patient inflows, the budget clearly demonstrates a forward-looking approach to building a competitive and resilient medical tourism ecosystem that contributes to economic growth.”
India’s MVT sector has grown steadily over the years, and cities like Hyderabad, Delhi, Chennai, Mumbai and Bengaluru are already well-positioned to scale as global healthcare destinations. With the right execution and private-sector partnership, this initiative can significantly strengthen India’s leadership in global medical tourism.”
Meaningful boost to leisure travel within India, which is increasingly being driven by Millennials and Gen Z
Aloke Bajpai, Group CEO & Rajnish Kumar, Group Co-CEO, ixigo says: “The Union Budget placing tourism at the centre of its employment and growth strategy is a strong and welcome signal for the sector, recognising its role in job creation, foreign exchange earnings and strengthening local economies across the country.
The increased emphasis on rail and road infrastructure, specifically the budget for New Railway Lines being increased by 14% in FY27 compared to FY26, as well as the increase by 10% of budgetary allocation for highway infrastructure, are both very encouraging moves for the travel industry. Seven High-Speed Rail corridors as ‘growth connectors’, with emphasis on the booming travel demand for Varanasi will enhance rail capacity. We also like the focus on Tier II and Tier III cities, including temple-towns, through the city economic regions (CER) development budgetary allocation of Rs. 5000 crores - this should result in a big boost for tourism in those cities.
This year’s budget has also taken steps to make international travel, both outbound and inbound, more accessible and affordable for Indian travellers. The proposal to reduce the TCS rate on overseas tour packages to a flat 2% (from the earlier 5% and 20% slab based system) is a welcome move for making outbound tourism more amenable. In addition, the proposed revision of international baggage clearance processes to simplify procedures and reduce dwell time will help deliver a smoother and faster airport experience for inbound travellers. The setting up of the National Institute of Hospitality and the upskilling of tourist guides will help improve service quality and enhance India’s position as a global tourist destination
The emphasis on nature-based and experience-led tourism with plans to build ecologically sustainable trekking and hiking trails across key mountain and forest regions is particularly encouraging and is likely to give a meaningful boost to leisure travel within India, which is increasingly being driven by Millennials and Gen Z.
At ixigo last year, we have seen rising interest in North-eastern region tourism further fueled by OTT platforms. The new Buddhist circuits announced in the FY27 Union Budget will significantly strengthen the development of tourism in the North East, across the states of Sikkim, Manipur, Assam, Arunachal Pradesh, Mizoram and Tripura, further enhancing connectivity and infrastructure in the region. It is encouraging to see the government continuing to invest in spiritual tourism capacity creation, an area where we’ve consistently seen massive demand and long-term potential.”
The emphasis on sustainable and responsible tourism is particularly significant
Ayu Tripathi, Director, Aahana Resort, adds: “It is encouraging to see the Union Budget recognise tourism as a strategic economic catalyst driving employment, strengthening local enterprise, and contributing to foreign exchange while placing India’s cultural and natural heritage at its core. As one of the country’s most employment-intensive and revenue-generating sectors, tourism has the capacity to play a far more expansive role in India’s growth story, and the Budget’s focus signals a clear intent to unlock that potential responsibly.
For Uttarakhand, the emphasis on sustainable and responsible tourism is particularly significant, as the state’s long-term appeal is intrinsically linked to the protection of its forests, rivers, and biodiversity. The proposal to upgrade the National Council for Hotel Management & Catering Technology into a National Institute of Hospitality, alongside structured upskilling of 10,000 guides, will meaningfully enhance service quality and destination interpretation. Initiatives such as the National Destination Digital Knowledge Grid and curated experiences like bird-watching trails further reinforce a model of tourism rooted in knowledge, conservation, and community engagement an approach that aligns strongly with the ethos of Jim Corbett National Park. Overall, the measures outlined lay the foundation for a more resilient and enduring tourism economy, built on skill development, environmental stewardship, and shared community benefit.”
The Budget will increase tourism demand and attract more visitors to culturally
Rahool Macarius, Market Managing Director, Eurasia, Wyndham Hotels & Resorts says: "We appreciate the government’s focus in the Union Budget 2026, which reinforces India’s commitment to strengthening the hospitality and tourism sector. By reimagining heritage sites, supporting Buddhist circuits, and enhancing connectivity through initiatives such as the Green High-Speed Rail Network, the Budget will increase tourism demand and attract more visitors to culturally, historically, and spiritually significant cities. This, in turn, will strengthen tourism in Tier-II and Tier-III regions, providing a strong platform for hospitality brands to expand alongside India’s growth trajectory. Initiatives such as world-class hospitality talent hubs, professional guides, and structured skilling programs are expected to elevate visitor experiences, extend stays, and support local economies. Coupled with digital destination initiatives and sustainable eco-trails, these measures will enhance service standards, create dignified livelihood opportunities for young talent, and give a meaningful boost to the overall growth and competitiveness of India’s hospitality sector.”
Creating dignified livelihood opportunities and nurturing young talent
Richa Adhia, Managing Director, Eight Continents Hotels & Resorts adds: “We appreciate the government’s focus in the Union Budget 2026 on creating dignified livelihood opportunities and nurturing young talent within India’s hospitality sector. Investments in professional guides, world-class hospitality talent hubs, and skill development initiatives will raise service standards and strengthen local employment. Alongside these workforce measures, efforts to reimagine heritage sites, promote digital destinations, expand eco-trails, develop sustainable adventure and medical tourism are expected to boost visitor engagement and attract global travellers. Together, these initiatives signal a forward-looking and positive Budget for the hospitality industry.”
Strengthen service excellence and enrich the guest journey
Somesh Agarwal, Managing Director & Chairman, Radisson Blu Palace Resort & Spa, Udaipur says: “The Union Budget 2026’s emphasis on revitalizing heritage destinations and promoting culturally and spiritually significant cities is a positive signal for India’s tourism sector. Programs such as Purvodaya tourism, enhanced connectivity, and skill development initiatives are poised to attract more travellers and open new avenues for hospitality brands to deliver distinctive and memorable experiences in iconic destinations like Udaipur. By fostering young talent and creating livelihood opportunities, these measures will strengthen service excellence and enrich the guest journey. Overall, this Budget lays the foundation for a vibrant and forward-looking tourism and hospitality landscape.”
Improve guest experiences and drive longer stays
Kush Kapoor, CEO of Roseate Hotels & Resorts adds: "The Union Budget’s strong focus on hospitality, tourism skilling and destination development is a welcome and timely step for our sector. The proposed National Institute of Hospitality will play a critical role in creating a future-ready talent pipeline, ensuring that hotels have access to skilled professionals aligned with global service standards. Initiatives such as structured training for tourist guides, the national digital destination registry and the emphasis on heritage, adventure and eco-tourism will directly enhance destination appeal, improve guest experiences and drive longer stays. For hotels, this translates into better storytelling, more immersive experiences for guests and a stronger ecosystem that supports sustainable growth and foreign exchange earnings.”
Wildlife and bird-watching themed travel routes
Deepak Chhabra, Founder – Holy Hotels adds: “The Union Budget 2026–27 signals a transformative moment for India’s tourism and hospitality sector, combining infrastructure growth with a focus on experience-led and sustainable travel. With a record ₹12.2 trillion capital expenditure, and over INR 1.5 lakh crore allocated to transport and multimodal connectivity, the Budget significantly enhances access to destinations, unlocking opportunities for new tourism circuits and regional hospitality growth.
Initiatives such as wildlife and bird-watching themed travel routes, improved rail connectivity, and institutional support for hospitality talent strengthen the link between infrastructure, skills, and local tourism ecosystems. For Holy Hotels, this integrated approach can boost tourist footfall and local economic participation by an estimated 15 - 20% over the coming years, supporting longer stays, responsible travel, and meaningful engagement with communities beyond metro hubs.
For hospitality providers such as Holy Hotels, these measures, combined with better GST compliance and efficiency through digitalisation, could reduce tax-related operational costs by 2–3 percent, enabling longer stays, responsible travel, and enhanced economic participation for local communities.”
A structured bridge between academia, industry, and government will help raise standards
Vicky Bachani, Co-Founder, Jugnu, Goa says: “India’s tourism and hospitality sector needs institution building and not just incentives. The proposed National Institute of Hospitality can play a defining role in creating future ready professionals who understand destination led hospitality, regional cultures, and experiential dining. For tourism and hospitality markets like Goa, which attract a strong international tourist audience, what we offer directly shapes India’s global tourism image and contributes to the economy. In such markets, success depends on authenticity, skill, and local relevance rather than replication. A structured bridge between academia, industry, and government will help raise standards, encourage innovation, and ensure that tourism growth is sustainable, meaningful, and globally competitive.”
