As the countdown to the Union Budget begins, the hospitality and tourism segment has high hopes as the industry plays a very vital role in economic growth by creating jobs and showcasing India's cultural heritage to attract foreign tourists. Expectations of the sector range from developing infrastructure in tourist destinations, streamlining GST structures, boosting investments, and encouraging niche tourism segments like wellness, adventure, and heritage tourism.
“We hope the government introduces targeted policies to enhance infrastructure development in key tourist destinations, streamlines GST structures for hospitality services, and incentivises investments in the sector. Tax rebates for eco-friendly initiatives, such as energy-efficient operations and sustainable tourism practices, would be a significant step in aligning the industry with global sustainability goals,” remarked Saurabh Gahoi, senior vice president, Ramee Group of Hotels.\
He added that improved access to affordable credit and subsidies for small and mid-sized hotels is the need of the hour as this would encourage expansion and modernisation, particularly in underserved regions. “Enhanced marketing and promotional efforts to position India as a global tourism hub would benefit the entire sector,” added Gahoi.
Different stakeholders in the segment feel that the hospitality industry must focus on building a $3 trillion tourism economy and welcoming 100 million international visitors annually by 2047 and in order to achieve this ambitious goal, sustainability and technological advancements must be prioritised.
“The hospitality industry should be supported by allowing Indian hotels to charge zero GST or receive a GST refund for foreign guests, similar to the GST benefits given to Indian software companies on exported services. This will foster more inbound tourism and enhance competitiveness. Additionally, investment in infrastructure, especially in remote tourist destinations, is crucial for expanding tourism and creating jobs,” pointed out Tarun Gulati, director, Himalayan Hotels.
Gulati feels that through initiatives that focus on sustainable tourism, cultural experiences, and digital innovation, India can transition from ‘Incredible India’ to ‘Inevitable India.’ “Continued support for research and technological innovations, as well as international marketing campaigns, will help position India as a holistic tourism hub, contributing to a robust and sustainable hospitality industry,” he added.
Industry players feel right government policies can make all the difference in the sector. To unlock India's full potential in heritage tourism and transform old properties into thriving tourism hubs, financial incentives such as tax breaks or subsidies must be encouraged.
“We need to stop sending everyone to the same five destinations. It is time to decongest overcrowded hotspots such as Shimla and Nainital and build up unexplored gems like Ramgarh, Palampur and Pangot with better infrastructure roads, and connectivity and promote them as the next must-sees destinations. As Indians continue to flock to affordable international destinations for vacations, it is imperative to lower GST on hotel rooms to promote domestic tourism, encouraging people to explore the beauty of their own country. At the same time, there is a glaring gap in skilled labour. Currently, we are training unskilled local workers ourselves because there is no government support for hospitality programmes. Tourism generates jobs, boosts local economies, and drives revenue for the government, yet it receives no subsidies or tax breaks. This needs to change,” said Sonali Sethi, head of strategic initiatives, Seclude Hotels Home Style.
Many players in the tourism and hospitality segment feel that the Union Budget 2025 presents a unique opportunity for the Modi 3.0 government to prioritise initiatives that can catalyse the growth of the travel and tourism sector. Beyond ongoing infrastructure projects, it is essential to allocate specific funds for smart tourism solutions, such as digitising tourist experiences and enhancing public transportation networks to improve accessibility for domestic and international travelers.
“Policy measures that encourage niche tourism segments like wellness, adventure, and heritage tourism can help position India as a year-round travel destination. Also, the growing demand for travel accessories, including sustainable and ergonomic solutions, highlights the need for supportive measures. Reducing GST rates for manufacturers in this sector can promote innovation, make products more affordable, and establish India as a leader in the global travel accessory market,” said Naina Parekh, founder, EUME.