New Delhi: The Centre proposed several measures in the Union Budget 2026 for the tourism sector, with Finance Minister Nirmala Sitharaman highlighting its importance in generating employment, earning foreign exchange and boosting local economies.
Niche tourism and eco-trails
Presenting the Union Budget, Sitharaman proposed the development of “ecologically sustainable” mountain trails in Himachal Pradesh, Uttarakhand and Jammu and Kashmir, and setting up the “National Institute of Hospitality.”
“The tourism sector has a large role to play in employment generation, forex earnings and expanding the local economy. I propose to set up a National Institute of Hospitality by upgrading the existing National Council for Hotel Management and Catering Technology,” she said.
India will host the first-ever Global Big Cat Summit to deliberate on conservation strategies with 95 countries.
Heritage and regional tourism
In her speech, the Finance Minister proposed to “develop 15 archeological sites,” including Lothal, Dholavira, Rakhigarhi, Sarnath, Hastinapur and Leh Palace into “vibrant experiential cultural destinations.”
“Excavated landscapes will be opened to the public through curated walkways and immersive storytelling skills and technologies will be introduced to help conservation labs, interpretation centres and guides,” she said.
A dedicated scheme will develop Buddhist circuits in the North-East region, covering Arunachal Pradesh, Sikkim, Assam, Manipur, Mizoram and Tripura. Further, the government aims to create five tourism destinations specifically within the five Purvodaya (eastern) states.
There is a renewed focus on providing modern infrastructure and basic amenities to temple towns through the mapping of City Economic Regions
Infrastructure and connectivity
To promote tourism in remote areas, a Seaplane VGF (Viability Gap Funding) Scheme will be introduced to support operations and indigenise manufacturing.
Seven High-Speed Rail corridors (such as Mumbai-Pune and Delhi-Varanasi) are planned to serve as “growth connectors” for passengers.
Taxation and travel ease
The Tax Collection at Source (TCS) on overseas tour program packages is reduced to a flat 2 per cent with the removal of the previous Rs 10 lakh threshold, although it also means this tax will apply to all tour packages.
Provisions governing baggage clearance during international travel will be revised to increase duty-free allowances and provide better clarity to passengers
Institutional and talent development
Upskilling guides: A pilot scheme will be launched to upskill 10,000 guides at 20 iconic tourist sites through a 12-week, high-quality training course developed in collaboration with the Indian Institute of Management (IIM).
Hospitality bridge: The government proposes to establish a National Institute of Hospitality by upgrading the existing National Council for Hotel Management and Catering Technology to serve as a bridge between academia, industry and government.
Digital documentation: A National Destination Digital Knowledge Grid will be created to digitally document cultural, spiritual and heritage sites of significance, fostering a new job ecosystem for researchers and content creators.
Tourism companies hail the budget
Real estate player Brigade Hotel Ventures Ltd said that the Budget has given the “strategic recognition” to the tourism sector.
City-headquartered Aarthi Scans and Labs also lauded the Budget, terming it as clear and strengthening healthcare capacity.
Vineet Verma, Director of Brigade Hotel Ventures Ltd, said the Budget’s emphasis on tourism goes beyond infrastructure and rightly addresses the sector’s biggest gap, skilled human capital.
“The emphasis on infrastructure-led development, experiential tourism and ease of doing business sends a strong signal to investors and operators alike. This can accelerate asset creation, improve quality standards, and unlock the sector’s true economic potential,” he said in a statement.
The tourism industry has welcomed the government’s focus on the travel and tourism sector as a long-term growth driver and strategic pillar of India’s growth story.
The rationalisation of Tax Collected at Source (TCS) on overseas tour packages and the focus on tier 2 and 3 cities, including temple-towns, through the city economic regions (CER) development budgetary allocation of Rs 5,000 crore, will act as a big boost for the tourism sector, top industry players said.
Rationalisation of TCS on overseas tour packages is a welcome step that addresses upfront liquidity impact on Indian outbound travellers, said Rajesh Magow, Chair, FICCI Tourism Committee and Co-founder and Group CEO, MakeMyTrip.
“Continued focus on regional connectivity and destination development, along with an emphasis on skilling and the creation of a national digital repository for destinations, will help improve destination discovery and enhance the overall traveller experience,” Magow added.
Aloke Bajpai, Group CEO and Rajnish Kumar, Group Co-CEO, ixigo, said the Union Budget has recognised the sector’s role in job creation, foreign exchange earnings and strengthening local economies across the country.
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