Tourism industry has received a big push in Union Budget
Credit: iStock Photo
Bengaluru: Acknowledging the need to unlock India’s vast but underutilised tourism potential, the Union Budget 2026 has laid out an aggressive roadmap to position tourism as a key driver of employment, foreign exchange earnings and local economic growth.
The measures have been widely welcomed by the travel and hospitality industry.
Presenting the Budget in the Lok Sabha on Sunday, Union Finance Minister Nirmala Sitharaman announced the setting up of a National Institute of Hospitality by upgrading the National Council for Hotel Management and Catering Technology (NCHMCT). “It will function as a bridge between academia, industry and the government,” she said.
The Finance Minister also proposed a pilot upskilling programme for 10,000 tour guides across 20 iconic tourist sites through a standardised 12-week hybrid training course, to be conducted in collaboration with an Indian Institute of Management. The move is aimed at improving service quality and ensuring consistent visitor experiences at major destinations.
A key digital push in the Budget is the creation of a National Destination Digital Knowledge Grid, which will digitally document India’s cultural, spiritual and heritage sites. “This initiative will create a new ecosystem of jobs for local researchers, historians, content creators and technology partners,” Sitharaman said.
Welcoming the proposal, Anand Babu, Founder of Digitour, said the digital repository was long overdue. “Heritage is India’s biggest ‘soft power’. The country hasn't harnessed its full potential yet. Digital tools are the best to promote this soft power."
The Budget also places strong emphasis on nature and wildlife tourism, proposing the development of ecologically sustainable trekking and hiking trails in Himachal Pradesh, Uttarakhand and Jammu and Kashmir; Araku Valley in the Eastern Ghats; and Podhigai Malai in the Western Ghats. It also outlines turtle trails at key nesting sites along the coasts of Odisha, Karnataka and Kerala, and bird-watching trails around Pulicat Lake.
To improve connectivity to remote destinations, Sitharaman announced incentives to indigenise the manufacturing of seaplanes, along with the introduction of a Seaplane Viability Gap Funding (VGF) Scheme to support operations. “This will enhance last-mile connectivity and promote tourism in difficult-to-access regions,” she said.
In a significant relief for outbound travellers, the Finance Minister proposed reducing the Tax Collected at Source (TCS) on overseas tour packages from the current 5% and 20% slabs to a flat 2%, without any threshold.
Reacting to the announcements, Rajesh Magow, Chair, FICCI Tourism Committee and Co-founder and Group CEO, MakeMyTrip, said the Budget reinforced tourism’s role as a long-term growth engine. “The rationalisation of TCS addresses the upfront liquidity impact on outbound travellers. Continued infrastructure-led investments have supported domestic tourism growth, and it is encouraging to see this momentum sustained,” he said.
He added that focus on regional connectivity, skilling and digital destination discovery would significantly enhance the traveller experience.
Manju Sharma, Managing Director, Jaypee Hotel and Resorts, said the upgradation of NCHMCT into a National Institute of Hospitality would strengthen talent development and service excellence. “The guide upskilling programme is a timely move towards consistent, high-quality experiences. The emphasis on sustainable eco-tourism reflects a balanced approach that aligns growth with environmental responsibility,” she said.
The Budget also outlines steps to promote medical tourism, develop temple towns, and expand Buddhist circuits across Arunachal Pradesh, Sikkim, Assam, Manipur, Mizoram and Tripura. In addition, it proposes the development of 15 ancient archaeological sites, including Lothal, Dholavira, Rakhigarhi, Adichanallur, Sarnath, Hastinapur and Leh Palace, into experiential cultural destinations. “Excavated landscapes will be opened through curated walkways, supported by immersive storytelling technologies,” the FM said.
Rikant Pittie, CEO and Co-Founder of EaseMyTrip, said the measures signalled a shift towards experience-driven travel. “The focus on heritage, medical tourism, skilling and sustainable experiences creates a strong foundation for innovation, jobs and inclusive growth,” he said.
Aloke Bajpai, Group CEO, ixigo, described the Budget’s tourism thrust as a strong signal. “The emphasis on rail and road infrastructure, along with TCS rationalisation and smoother international baggage clearance, will make both domestic and international travel more accessible and efficient,” he concluded.