Union Minister of Finance and Corporate Affairs Nirmala Sitharaman presented the Union Budget 2025-26 in Parliament on 1st Feb 2025. She unveiled plans to develop 50 tourist destinations, boosting the tourism budget to INR 2,541.06 crore, focusing on employment-led growth. We bring a summary of the post- budget reactions from the travel and hospitality industry.
Developing 50 destinations
Rajesh Magow, Co-founder & Group CEO, MakeMyTrip said: “The Finance Minister’s announcements reflect a clear intent to harness the potential of travel and tourism sector by prioritizing infrastructure, improving access, incentivizing investment, and expanding its reach beyond established hubs. Strengthening regional connectivity through the modified UDAN scheme will unlock new corridors of travel, bringing deeper parts of India into the tourism fold. The 50-year interest-free loan to state governments will drive infrastructure development at the destination level, thereby contributing to the tourism growth story.
The challenge-mode approach to developing 50 destinations, backed by performance-linked incentives, shifts the focus to outcome-driven execution—encouraging states to compete and innovate in destination management.
Equally important is the structured push for hospitality. Including hotels in the harmonized infrastructure list across 50 destinations will unlock long-term financing and drive investment, while extending Mudra loans to homestays ensures that smaller entrepreneurs and local communities are equally part of this growth story.
Expansion of the UDAN scheme
JB Singh, President & CEO of InterGlobe Hotels, added: “The Union Budget 2025-26 demonstrates a visionary approach to transforming India’s hospitality and tourism sector. The expansion of the UDAN scheme, will significantly enhance regional connectivity and unlock tourism potential. The budget’s commitment to investing in hospitality training programs at established Institutes of Hotel Management (IHMs) will strengthen the industry’s talent pipeline. Additionally, streamlined e-visa processes and visa-fee waivers will attract more foreign tourists. We believe these strategic measures will drive long-term growth, create employment opportunities, and position India as a premier global tourism destination.”
Promoting spiritual and medical tourism regionally
K.B. Kachru, Chairman, Radisson Hotel Group South Asia & President – Hotel Association of India (HAI) said:
“Budget is progressive, especially with its focus on tourism and job creation. The government’s commitment to developing 50 new destinations, and improving infrastructure, is promising. This year’s budget very well highlights the importance of promoting spiritual and medical tourism with neighbouring countries and simplifying visa processes to enhance international travel. Overall, the initiatives taken by the government in this year’s budget are the steps in the right direction for the industry.”
Focus on skilled workforce
Aditya Pande, Group Chief Executive Officer, InterGlobe Enterprises stated:
“This budget outlines a compelling roadmap for a Viksit Bharat. The focus on boosting consumption through targeted tax relief for the middle class, coupled with the government’s commitment to streamlining tax procedures, will significantly improve ease of doing business and unlock further economic potential.
At InterGlobe Enterprises, we are particularly encouraged by the strategic investments and vision for strengthening the holistic tourism ecosystem in the country, with the development of infrastructure and focus on skilled workforce. These initiatives lay a solid foundation for sustained economic progress and a brighter future for the country.”
Focus on public-private collaboration in developing 22 top destinations
Karan Agarwal, Director of Cox & Kings, shares his insights on the Budget:
“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.”
Visa easements and inspirational destination marketing campaigns
Krishna Rathi, Senior Country Director, India Subcontinent and MEA at Agoda, said:
“Agoda acknowledges and celebrates India’s exciting potential as a top travel destination and is enthusiastic about the tourism plans announced in this year’s Union Budget. The investment in recent years in infrastructure enhancements and destination marketing is undeniably paying off. At Agoda, we see this reflected in a 22% year-on-year increase in inbound accommodation searches to India. With this year’s announced investments in the expansion of the UDAN scheme to connect 120 new destinations, enhanced support for homestays, and the development of top tourist destinations in collaboration with state governments, we’re hopeful that India will be able to sustain this momentum. Especially as this comes on top of continuing positive trends like visa easements and inspirational destination marketing campaigns promoting India’s diverse experiences and attractions.”
Extension of MUDRA loans to homestays
Shikhar Aggarwal, JMD of BLS International said: The government’s focus on transforming India’s tourism landscape through strategic partnerships and policy reforms is a visionary leap forward. The development of 50 iconic tourist sites in collaboration with states will significantly enhance India’s global appeal as a premier travel destination. At BLS International, we are particularly encouraged by the emphasis on streamlining visa processes and expanding medical tourism through the ‘Heal in India’ initiative, which aligns with our expertise in delivering seamless visa and consular services worldwide.
The extension of MUDRA loans to homestays and the harmonized scheme for hotels will empower local entrepreneurs while ensuring standardized, high-quality hospitality infrastructure is a critical step to support inbound and domestic tourism growth. Furthermore, the special focus on Buddhist circuits and spiritual tourism opens new avenues for niche travel experiences, which we are well-positioned to facilitate through our expanded visa service networks.
We commend the government’s holistic approach to fostering public-private partnerships and creating an ecosystem where tourism becomes a catalyst for economic empowerment. These measures will not only attract global travelers but also strengthen India’s position as a hub for cultural, medical, and sustainable tourism. BLS International remains committed to supporting this transformative agenda by enhancing accessibility and connectivity for travelers through innovative, tech-driven solutions.
Tax exemption for upto INR 12 lakh income
Kush Kapoor, CEO, Roseate Hotels & Resorts added: “The Union Budget 2025 presents a forward-thinking approach that is bound to benefit the hospitality and tourism sector significantly. The announcement of visa waivers for select foreign tourist groups will undoubtedly make India a more accessible and attractive destination for global travelers. The provision of Mudra loans to support homestays is a commendable step toward boosting grassroots tourism and encouraging local entrepreneurship. These measures will not only enhance travel experiences but also strengthen community-driven hospitality ventures.
Moreover, the tax exemption for upto INR 12 lakh income, and the resulting relief for a large section of the population are game changers for the industry. With higher disposable incomes, people are likely to increase their spending on travel, dining, and leisure experiences. This boost in discretionary spending will drive demand across hotels, restaurants, and other tourism-related businesses. The government’s thoughtful initiatives will contribute to bolstering consumer confidence and ultimately play a significant role in the growth of the hospitality sector and the nation’s economy as a whole.”
Skill development initiatives through IHMs
Sarbendra Sarkar, Founder & MD, Cygnett Hotels and Resorts said: “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).
The government’s plan to introduce a modified UDAN scheme for strengthening connectivity to additional 120 destinations and supporting helipads development in northeastern region will help to connect potential tourist destinations in the region.
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. Cygnett Hotels is keen to align with these initiatives, expanding our footprint in high-growth destinations and playing a pivotal role in India’s tourism success story.”
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