Budget 2026-27: Tourism sector seeks infra development, GST rationalisation, credit access for MSMEs and more

According to the World Travel & Tourism Council (WTTC), the sector contributed ₹21.15 lakh crore to India’s GDP in calendar year 2024 (CY24) and is projected to reach ₹43.25 lakh crore by CY34, supporting nearly 63 million jobs. For CY 2025, the WTTC forecasted that the sector’s economic contribution would exceed ₹22 lakh crore and projected that it would generate 48 million jobs.

Domestic tourists' spending reached ₹15.5 crore in 2024, marking a 22% increase from the pre-pandemic levels, and the number is expected to have risen to ₹16.8 lakh crore in 2025, the IBEF report stated.

Furthermore, international visitor spending also surged to ₹3.1 lakh crore in 2024 and is expected to have reached ₹3.2 lakh crore in 2025. Foreign Tourist Arrivals (FTA) stood at 9.7 million in CY24 and reached 26.1 lakh during the January-March 2025 period, with another 6.26 lakh arrivals in April alone. The sector serves as a major source of foreign exchange for the country.

The government aims to attract 100 million inbound tourists by 2047 with initiatives such as Vision@2047. To achieve this aim, the 2026-27 budget will play an important role.

The 2026-27 budget is set to be tabled by Finance Minister Nirmala Sitharaman on February 1 at 11 am. As the budget day falls on a Sunday, the stock exchanges, NSE and BSE, will remain open for trading.

Ahead of the Union Budget, here are the key expectations from the travel and tourism sector for the government.

“As a representative of the travel industry, we look at the Union Budget as an important opportunity to further strengthen India’s travel and tourism ecosystem, which plays a vital role in employment generation, regional development, and economic growth. The sector supports millions of livelihoods across airlines, hospitality, transport, and allied services, while also promoting cultural exchange and regional inclusion,” said Alok K Singh, Chairman & CEO SNVA Traveltech (DBA Travomint).

He stated that the industry hopes that the Budget will continue to prioritise infrastructure development, regional and last-mile connectivity, and policies that enhance ease of doing business.

He added that there are hopes of a continued focus on airport modernisation, rail and road connectivity, and digital travel infrastructure, which would significantly improve the overall travel experience for both domestic and international travellers.

“Supportive measures that enhance affordability, encourage domestic tourism, and strengthen inbound travel would further accelerate demand. For travel enterprises, particularly MSMEs and start-ups, stable regulatory frameworks and access to credit can help ensure sustainable growth,” Singh said.

Singh highlighted the industry’s hope of continued investments in skill development, sustainability initiatives, and technology adoption, which will enable the sector to improve service quality and global competitiveness.

He noted that with balanced and forward-looking policy support, the travel and tourism industry could continue to contribute responsibly to India’s economic progress while aligning with national development priorities.

“The hospitality and foodservice sector has become a strong reflection of India’s evolving consumption story, driven by rising disposable incomes, experiential spending and renewed momentum in tourism and events. As we look to the Union Budget, continued focus on infrastructure development, tourism promotion and urban connectivity will have a meaningful multiplier effect on hospitality-led businesses, enabling India to position itself as a global destination for premium culinary and lifestyle experiences,” said Sanjay Manohar Vazirani, Chairman and Managing Director, Foodlink F&B Holdings (India).

Vazirani noted that from an industry perspective, rationalisation of GST, clarity on compliance norms, and support for skill development would help improve operating efficiencies while strengthening employment generation.

“Measures that ease access to credit, simplify trade processes, and support globally expanding Indian hospitality brands will not only benefit the sector but also contribute to a stronger services-driven economy. A growth-oriented Budget that balances fiscal discipline with consumption and tourism-led growth can further accelerate India’s hospitality and experiential economy,” Vazirani added.

Tourism sector allocations in Budget 2025

The government had allocated ₹2,541.06 crore to the tourism sector in the 2025-26 Union Budget for enhancing infrastructure, skill development, and travel facilitation.

One of the major initiatives included developing the top 50 tourist destinations in partnership with states through a “challenge mode”, with the aims of elevating tourism infrastructure, improving ease of travel, and strengthening connectivity to key sites. Under the framework, states would be required to provide land for critical infrastructure, including hotels, which would be classified under the Infrastructure Harmonized Master List (HML) to attract investments and boost hospitality services.

Furthermore, 40 projects across 23 states will receive interest-free loans for 50 years, amounting to ₹3,295.8 crore under the Special Assistance to States for Capital Investment.

Additionally, the Swadesh Darshan Scheme 2.0 (SD 2.0), which focuses on sustainable and responsible tourism, received ₹793.2 crore in total funding.

The Government had allocated ₹60 crore for skill development in FY26 to support intensive skill-development programs for youth, including training in hospitality management and other tourism-related services.