The COVID-19 pandemic significantly impacted the global tourism industry. The sector returned to near normalcy in 2024. Worldwide, international tourist arrivals stood at 1.46 billion in 2024, which is 99.6 per cent of the pre-pandemic, or 2019, level of 1.47 billion.
However, even in 2025, India’s tourism sector is yet to reach those levels; foreign tourist arrivals by the end of September for the CY2025 stood at 81 per cent of the September of CY2019. Stakeholders in the sector feel that the steps should be taken in the budget to help the sector reach the pre-COVID levels.
One bright spot in the tourism sector was that the foreign tourist arrivals to India were up 1.6 per cent in 2024 over 2019. “The budget for overseas promotion and publicity for fiscal 2026 was set at just Rs 3 crore versus Rs 415 crore in fiscal 2019. Moreover, Rs 137 crore was budgeted for domestic publicity and promotion for fiscal 2026. Increasing budgeted spends for overseas publicity back to fiscal 2019 levels would help improve arrivals and the share of tourism in India’s GDP as well, because jobs associated with tourism will also rise from 13.3 per cent of total employment as of H1FY26,” pointed out Pushan Sharma, Director, Crisil Intelligence on the tourism sector.
Travel and tourism are at a genuine inflexion point. As they continue their journey towards reaching pre-COVID levels, it is clearly visible that the demand is back, but infrastructure and connectivity will decide whether this growth compounds or plateaus. Though aviation capacity is expanding rapidly, that momentum needs to be matched with faster airport expansion, stronger regional connectivity, and smoother aviation infrastructure to unlock tourism’s full impact. Just as important is last-mile integration connecting airports seamlessly with rail and road networks because that’s where the real multiplier effect lies.
“Beyond connectivity, the industry needs structural support. Industry status for tourism and hospitality, easier access to long-term financing, and continued investment in destination development would go a long way in improving India’s global competitiveness as a travel market.
Simplifying tax structures like GST and incentivising skill development are also critical, especially as domestic travel remains strong and international travel continues its gradual recovery. If budget 2026 focuses on infrastructure, financing, and execution, it won’t just support growth; it will help build a more resilient, globally relevant travel ecosystem,” remarked Hari Ganapathy, Co‑Founder, Pickyourtrail.
Stakeholders in the sector feel that India’s travel momentum has evolved into a powerful economic multiplier, driving significant growth across retail, trade, and the broader lifestyle ecosystem. As mobility becomes a cornerstone of the Indian experience, there is a surge in demand for travel gear, with the market projected to reach Rs 267 billion by 2028. This shift is particularly evident in Tier 2 and 3 markets, where rising aspirations and improved connectivity are transforming luggage from a basic utility into a lifestyle choice.
“For Budget 2026, we expect a decisive policy push toward GST rationalisation on travel products made of man-made fibres and polymers and reforms that bolster domestic manufacturing. Strengthening MSME supply chains and incentivising "Made in India" production will be critical to meeting domestic demand while unlocking our massive export potential. India can emerge as a global hub for the travel-gear sector, ensuring this industry remains a vital contributor to our consumption-led GDP growth,” said Tushar Kamath, CFO, uppercase.
Similarly, the stakeholders in the travel and tourism sector feel that the hospitality and food services sector is at a critical inflexion point and revisiting the GST notification on commercial leases under the Reverse Charge Mechanism would provide much-needed relief to operators already managing tight cash flows. “Reintroducing support mechanisms like SEIS can also strengthen restaurants that contribute to foreign exchange earnings. What the industry truly needs is targeted subsidies, easier access to debt for SMEs and formal recognition through industry status, considering its significant role in employment generation. A dedicated food services ministry, along with structured employee welfare initiatives, would go a long way in building a more resilient and sustainable ecosystem,” remarked Pranav Rungta, Co-founder and Director of Nksha Restaurant and Vice President of NRAI Mumbai.
