The Union Budget 2026 has positioned tourism, hospitality, and connectivity as central elements of India’s economic strategy, emphasizing the creation of skills, improving access, and supporting destination-led growth.
A major proposal in the Budget is upgrading the National Council for Hotel Management and Catering Technology into a National Institute of Hospitality.
This institute aims to develop a globally competitive hospitality workforce, closing the gap between academia and the industry. The Budget also focuses on the digital enablement of tourism.
Key Highlights
The plans for national platforms that facilitate destination management and creator-led promotion, plan to improve trip planning, discoverability, and visitor engagement.
To ease cash flow for travelers, the government has proposed reducing Tax Collected at Source on overseas tour packages to 2%.
Sustainable tourism and heritage tourism feature prominently, with initiatives to promote eco trails, adventure tourism, and nature-based experiences, alongside reimagining archaeological assets and boosting Buddhist circuits. Eastern India also receives attention with the Purvodaya initiative aimed at unlocking tourism potential.
The medical tourism sector is positioned for growth, supported by affordable healthcare and strong hospitality infrastructure. A comprehensive approach to developing tourism as a multi-dimensional economic engine promises job creation, regional development, and long-term resilience.
Pranav Rungta, Co‑Founder & Director, Nksha Restaurant and Vice President, NRAI Mumbai: “Budget 2026 is a positive step for India’s hospitality sector. Announcements like the first-ever National Institute of Hospitality and structured skill development for tourist guides will strengthen service standards and prepare our workforce to meet growing domestic and international demand.At the same time, restaurants continue to face structural challenges such as GST on commercial leases, access to export incentives like SEIS and easier SME support. Addressing these challenges alongside rising tourism and dining demand is key to building a resilient, sustainable and globally competitive hospitality sector”
Kunal Vasudeva, Managing Director and Co-Founder, Indian School of Hospitality: “The Union Budget 2026 places education at the centre of India’s economic ambition. The Education to Employment and Enterprise framework, university townships, and investments in future technologies signal that education is being treated as national infrastructure. The next phase rests on execution at scale through teacher capability, strong primary education outcomes, and delivery standards that work across the country. Sustained focus here will anchor services-led growth and Viksit Bharat.”
Amrita Gupta, Director, Manglam Group and CEO, Manglam Spa and Resorts: “Budget 2026 sends a clear and positive signal for tourism and hospitality. Continued emphasis on infrastructure, connectivity and destination development will strengthen India’s position as a global travel hub. The focus on developing 15 archaeological and cultural sites, promoting eco-tourism, and expanding adventure and nature-led experiences reflects a well-rounded approach to destination building. Equally important is the push to improve regional connectivity and tourism circuits, which will unlock new growth opportunities across leisure, wellness and experiential travel. For Manglam, this aligns closely with our hospitality vision of creating thoughtfully designed destinations that celebrate nature, culture and sustainable tourism, particularly in markets like Rajasthan.”
Anil Chadha, Managing Director, ITC Hotels Limited: “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.”
Paritosh Ladhani, Joint Managing Director of SLMG Beverages: “The Union Budget 2026 strongly reinforces a manufacturing-first, ‘Make in India’ approach, which is encouraging for companies that are deeply invested in domestic production and local supply chains. The continued push on infrastructure, with capital expenditure raised to ₹12.2 lakh crore, will directly benefit beverage manufacturers by improving logistics efficiency, distribution reach, and last-mile connectivity across markets. The focus on localisation across bottling, packaging and allied inputs supports greater cost stability and resilience, while sustained support for MSMEs remains critical given their integral role in our vendor and transport ecosystem. Although there were no direct tax incentives for non-alcoholic beverages, the broader pro-manufacturing and pro-consumption policy environment, along with ongoing discussions on GST rationalisation, provides a positive foundation for volume-led growth and long-term expansion of India’s packaged beverage sector.”
Dr Nipun Sharma, CEO, TeamLease Degree Apprenticeship: “The proposal to establish a National Institute of Hospitality is a timely step toward strengthening one of India’s most employment-intensive sectors. India’s hospitality capacity is scaling rapidly, with an estimated 2.48 million lodging rooms operational as of June 2024, projected to rise to 3.1 million by 2029 and 4.1 million by 2034. This expansion will drive significant demand for skilled talent across operations, service delivery, and management. A national institution that bridges academia, industry, and government can help standardise skills, improve service quality, and create structured career pathways that support employment growth and regional development.”
Manoj Bhat, Managing Director & CEO of Mahindra Holidays & Resorts India Ltd: “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.”
Jitin Makkar, Senior Vice President and Group Head, Corporate Ratings, ICRA Limited: “Development of several heritage and cultural sites, including 15 new archaeological sites, hosting the first-ever Global Big Cat Summit, continued focus on medical tourism, and mountain trains to specific states in hill stations are likely to boost the demand for domestic hospitality sector while also attracting foreign tourists. This apart, set up of National Institute of Hospitality focusing on upskilling, and proposals around enhancing trekking experiences, turtle trails are key positives. While the reduction in TCS on international tour programme makes international travel cheaper, this is unlikely to materially substitute the domestic demand.”
Vikram Lalvani, Managing Director & CEO, Sterling Holiday Resorts: “The Union Budget 2026 reflects a clear thematic shift in India’s tourism agenda from destinations to purpose-led journeys. It positions tourism as a multi-dimensional engine anchored in wellness and healing, spiritual and cultural circuits, nature and conservation-led travel, adventure and mountain ecosystems, and stronger regional connectivity that enables exploration beyond metros.
Equally significant is the focus on strengthening the sector’s foundations through hospitality education and skilling, structured upskilling of guides, and the creation of a national digital knowledge grid—measures that can raise service standards, enhance visitor experience, and support sustainable destination development.
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Initiatives spanning Buddhist circuits, sustainable Himalayan hiking trails, medical and wellness tourism, Ayurveda, heritage-led travel, and conservation-linked trails such as Odisha’s turtle nesting corridors together create the right ecosystem for responsible growth where communities, travellers and destinations all benefit. Overall, the Budget creates a strong tailwind for experience-led hospitality and tourism models built around circuits, longer stays and more meaningful travel.”
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