Union Budget 2025: Key expectations of the travel and tourism sector

Finance Minister Nirmala Sitharaman is all set to present her 8th consecutive Union Budget onSaturday February 1 Therersquos anticipation and hope for structured measures across sectors Travel and tourism experts are optimistic about the budget eyeing reforms like GST rationalisation infrastructure status among others ndash demands that were overlooked in the previous budgetA look back at Union Budget 2024 ndash Tourism and hospitalityUnion Budget 2024 measures gave a push to spiritual tourism announcing development of some spiritual sites Key highlights for the travel tourism and hospitality industries from the previous budget includeComprehensive development of the Vishnupad Temple at Gaya and Mahabodhi Temple at Bodh Gaya in Bihar to transform them into world class pilgrim and tourist destinationsDevelopment of Rajgir which holds religious significance for Hindus Buddhists and JainsGovernment to support the development of Nalanda as a tourist centre besides reviving Nalanda University to its glorious statureAssistance for the development of Odisharsquos scenic beauty temples monuments craftsmanship wildlife sanctuaries natural landscapes and pristine beachesA simpler tax regime proposed for foreign shipping companies operating domestic cruises in the country to realise the potential of cruise tourismWhile several experts appreciated the reforms others expressed disappointment in key demands being ignored In a statement Travel Agents Association of India TAAI had expressed disappointment over demands like reduction in Aviation Turbine Fuel cost rationalisation of GST rates and abolishment of TCS on outbound travel being ignoredAlso ReadBudget 2024 travel and tourism Governments spiritual tourism push lacks hotel development policies industry continues to seek infrastructure statusKey expectations from Union Budget 2025GST reformsGST rationalisation and other tax reforms top the list of expectations from this budget for tourism and hospitality expertsStating their key expectations in a press release Federation of Hotel amp Restaurant Associations of India FHRAI called for the rationalisation of GST rates on hospitality servicesldquoThe current GST structure is among the highest in the world which makes India less competitive compared to neighbouring countries FHRAI recommends delinking GST on restaurants from room tariffs in hotels and restructuring GST rates for restaurants banquets and eventsrdquo it readReflecting more on the GST reforms needed Rajesh Magow Cofounder and Group CEO MakeMyTrip says ldquoAllowing GST credit for hotel construction and rationalising GST rates will help reduce the overall cost of accommodation Besides there are couple of other operational and disparityrelated GST issues faced by Online Travel Agents OTAs Mandatory statewise GST registration with a physical presence in every state is adding to the administrative costs and management overhead unnecessarily Since the nature of OTAs business is online if registration in different states can be allowed using their central head office address it will help in streamlining operations reduce costs and improve efficiencyrdquoVishal Kamat Executive Director at Kamat Hotels India Ltd and Chairman of CII Maharashtra Chapter said ldquoStreamlining GST and consolidating multiple tax heads would go a long way in easing operational burdensrdquoSimplification of visa processComplex visa processes pose a challenge in the growth of global tourism Sector leaders are hoping for simplification of these rules and processesSandeep Arora director of Brightsun Travel India states ldquoA key area we believe should be addressed is the simplification of the visa process Streamlining visa applications will encourage more foreign visitors to explore India boosting tourism numbers and generating increased revenues for the country We believe that these measures will not only boost international tourism but will also create valuable employment opportunities further contributing to the longterm growth of the travel sectorrdquoEchoing a similar sentiment Kamat states ldquoSimplifying visa processes and establishing visafree travel agreements with friendly nations could position India as a global transit hubrdquoInfrastructural development and other policiesOther expectations of the sector include continued focus on infrastructural development cultural initiatives streamlined licensing policies among othersArora says ldquoWe hope to see a focus on policies that promote infrastructure development particularly in key tourist destinations to improve accessibility and enhance visitor experiences The preservation and promotion of heritage sites is also crucial as it will help attract more international tourists and showcase the countrys rich cultural heritagerdquoKamat believes that hosting global and cultural events has spotlighted Indiarsquos potential ldquoAs part of the CII G20 initiative Irsquove witnessed how these efforts amplify tourism and hospitality States like Rajasthan and Gujarat have set benchmarks by hosting vibrant festivals and cultural events Such initiatives boost local economiesmdashfrom tea vendors to transport operators to retail businessesrdquoAdvocating for continuation of the spiritual tourism push facilitated through Union Budget 2024 he adds ldquoAs we can see from the way people are visiting Ayodhya Mahakumbh etc there is a definite desire in people to participate in such festivities and explore spiritual and religious destinations So focus on spiritual tourism should continue not only this year but lifelong Our identity and beliefs are importantrdquoSumming up the demands of FHRAI Pradeep Shetty VicePresident of FHRAI said in the statement ldquoThe hospitality and tourism sector is crucial to Indiarsquos economic growth It provides employment opportunities and generates substantial foreign exchange earnings However the sector is currently facing multiple challenges due to restrictive policies and regulations By granting infrastructure status to smaller projects streamlining the licensing process and addressing GST issues we can help unlock the full potential of this sector These reforms will create a more competitive and sustainable environment for businesses which will in turn help India position itself as a global leader in tourism This is an opportunity for the government to align policies with the growing demands of the tourism industry and ensure that India remains a top destination for both domestic and international visitorsrdquo