P Krishna Kumar
New Delhi, Feb 2 (.) The union Budget presented by Finance Minister Nirmala Sitharaman on Sunday evoked mixed response from the travel, tourism and hospitality industry in the country.
The reduction in TCS from five and 20 per cent to 2 per cent flat without cap has brought relief to travel agents and tour operators selling international travel packages. However, the proposals have nothing to offer on international marketing and promotions, industry sources said.
By not earmarking any budget under the overseas marketing and promotions head, the Finance Minister has poured cold water on the expectations of the inbound travel trade community, the flag-bearers of Incredible India, they added.
Deep Kalra, chairman of World Travel and Tourism Council (WTTC) India Initiative welcomed the “build first” approach in the Budget of creating right tourism infrastructure in terms of hiking and trekking trails, digital knowledge grid for heritage tourism and conservation and building iconic culture destinations.
Kalra said the proposal to reduce the TCS on overseas tour packages to 2 per cent will go a long way in “removing the unnecessary friction” from international travel planning of Indian travellers.
Kalra is also the founder and chairman of MakeMyTrip. He also appreciated the “strong focus on connectivity” in the Budget and the Viability Gap Funding for manufacturing and supplying seaplanes indigenously.
“The new baggage clearance reforms signal a more traveller-friendly framework, with clearer rules on temporary personal goods and facilitation aligned to modern travel realities. While we need to read the fine print, this year’s allocation for Ministry of Tourism is a clear “build-first” signal: most of the big increase is going into creating/upgrade of tourism infrastructure,” Kalra said.
Jyotsna Suri, chairperson of LaLit Hotel Group and Vice Chairman of WTTCII, highlighted particularly the announcement to upgrade National Council for Hotel Management & Catering Technology (NCHMCT) into National Institute of Hospitality (NIH) to bridge the skill gap.

“These are forward-looking initiatives that will strengthen India’s tourism value chain and elevate the visitor experience. The Budget’s emphasis on building high-quality, sustainable tourism products — such as eco-trails and immersive heritage experiences— signals a commitment to long-term impact,” Suri said.
“Targeted efforts in developing Purvodaya and Buddhist circuit destinations in the North-East, Medical Value Tourism hubs and inclusive skilling programmes, including for Divyangjans in hospitality and F&B, are steps toward more equitable and regionally balanced growth,” she said.
Sharing the concern of not having a “dedicated allocation for overseas tourism promotion”, Ravi Gosain, president, Indian Assocation of Tour Operators (IATO), the national body of inbound tour operators, said that there is “timely” focus on many areas such as guide skilling, National Institute of Hospitality, Digital Knowldge Grid, and push for ecotourism trails. However, a lack of a dedicated allocation for overseas tourism promotion remains a concern, Gosain said.
While appreciating the overall direction of the Budget, the hotel industry, a critical component of the tourism ecosystem, was disappointed as the government once again ignored the industry demand for infrastructure status.
“Despite the Budget’s positive thrust, a long-standing aspiration of the sector, comprehensive infrastructure recognition, remains unmet”, said KB Kachru, president, Hotel Association of India (HAI).
“Realizing the sector’s true potential requires key structural reforms such as expanding infrastructure recognition beyond the currently designated destinations to ensure equitable access to capital, and placing tourism on the concurrent list to strengthen Centre-state policy,” said Kachru.
“These enablers will amplify the impact of current initiatives and provide a strong foundation for sustainable, long-term growth across the tourism sector,” said Kachru.
Federation of Hotel & Restaurant Associations of India (FHRAI) welcomed the focus of the budget to “place tourism at the centre of the growth strategy” linking it directly to job creation, foreign exchange earnings and local economic development.
“The proposal to create a national institute of hospitality and work closely with academia and industry in a timely step towards strengthening skills and service standards,” said Surendra Kumar Jaiswal, president, FHRAI.
While the Budget talks about aspirational schemes to develop new ecotourism trails in the Himalayas and Buddhist heritage trails in the northeastern part, Destination Digital Knowledge Grids, there is no visible allocation for these new programmes in the annual budget.
The estimated budget allocation for the tourism ministry (Rs 2,438 crore) remained almost unchanged compared to the 2025-26 estimates, and nearly 88% of the estimated Budget is dedicated to two flagship programmes of ‘Swadesh darshan’ and ‘PRASAD’.
. KK PRS