The Travel and tourism industry not only have great business potentials but can be among the biggest employment-generating sectors for India’s economy. Ahead of the 2025 Union Budget, industry veterans have shared their wish list with CNBC-TV18. Let’s take a look at what their expectations are from Finance Minister Nirmala Sitharaman, who will present the Budget on Saturday (February 1). (Image: PTI)
The tourism industry wants relief in Tax Collected at Source (TCS) during foreign travel. “Reduction of TCS rate will enhance the competitiveness of Indian tourism on the global stage and simplify compliance,” said Vishal Suri, MD & CEO, SOTC Travel. A high TCS rate increases expenses for Indian tourists, making international travel less accessible.
Simplification of Goods and Services (GST) rates on hospitality services is another important tax-related demand from the industry. The industry particularly wants the government to merge the 18% GST for hotels with room rates above Rs 7,500 into a lower category. The industry argues that this will rationalise the tax structure and attract more tourists compared to Asian competitors.
Improving and expanding connectivity, the industry says, is key for the growth of the sector. “Investment in transport infrastructure must remain a priority, particularly in underdeveloped regions and unexplored destinations. Strengthening air, rail and road connectivity is essential to unlock India’s full potential as a travel destination,” said Mahesh Iyer, MD and CEO, Thomas Cook (India). (Image: Reuters)
Rise of spiritual tourism, which Jefferies notes will reach $443 billion by FY33, is being seen as a potential gamechanger for the travel and tourism sector. “We expect the government to fund more states to develop spiritual tourism through schemes like PRASHAD, Dheko Apna Desh and Swadesh Darshan 2.0,” said Nishant Pitti, Chairman, EaseMyTrip. Moreover, the sector expects continued support for religious tourism circuits like the Ramayana and Buddhist circuits. (Image: Reuters)
The niche segment has untapped potential in India and industry players want the government to support initiatives in adventure tourism, eco-tourism and rural heritage tourism. These forms of tourism are considered sustainable, which not only help maintain the ecological balance of tourist hubs but will also add $151.88 million to the economy by 2032. “Budget 2025 should prioritise the development of eco-friendly infrastructure, incentivise sustainable practices among tour operators, and support initiatives that minimise the environmental impact,” says Rama Mahendru, Country General Manager- India, Intrepid Travel. (Image: AP Photo)
With technology becoming a key enabler for the industry, stakeholders are pitching for more investments into digital infrastructure, which is likely to smoothen the journey. Suresh Khadakbhavi, CEO of Digi Yatra Foundation, which aims to make air travel seamless, is of the view that ease of visa and immigration processes will drive tech innovation in the sector. “Digitisation”, he added, “Will help us travel smarter, personalise services, and increase operational efficiency.” (Image: Shutterstock)
Tourism accounts for about 5% of the economy. However, starting a business in this sector faces several challenges, say insiders. They added that the 2025 Union Budget must focus on simplifying processes, reducing regulatory barriers, and fostering an investment-friendly environment. They also hope for clear policies around single-window clearances for tourism-related projects.
With the rise in disposable income, Indians are becoming globetrotters. India has one of the most promising outbound tourism markets in the world. Outbound tourism can significantly boost India’s GDP through auxiliary industries like travel insurance, foreign exchange services, and visa processing. Apart from relief under the Liberalised Remittance Scheme, Vineet Gopal, Executive Board Member, Outbound Tour Operators Association of India, explained that the government needs to bring policies to create parity with international outbound travel players. (Image: Shutterstock)