The Indian government is set to reclassify tourism investments as infrastructure spending to attract more funds and businesses to the sector. Suman Billa, Additional Secretary for Tourism, emphasised that the tourism supply side is not growing due to unfavorable financial conditions. Currently, hotel investments fall under real estate, resulting in shorter loan tenures and higher interest rates. Reclassification would extend repayment periods to 15 years and reduce interest rates to 7–8.5 %, making tourism investments more attractive.
To accelerate growth, the Union Budget has identified 50 new tourist destinations that will automatically qualify for infrastructure status. State governments will contribute land as equity, while the Centre will provide essential infrastructure. This strategy aims to create investment-friendly hubs that generate jobs and promote community engagement. However, extending this classification nationwide remains constrained by fiscal policy limitations.
The government is also working to improve the ease of doing business in the tourism sector. Currently, setting up a hotel in India requires 56 clearances, each taking about 60 days. This bureaucratic delay discourages investors. To address this, the Department for Promotion of Industry and Internal Trade (DPIIT) is developing a streamlined framework to rationalise the licensing process.
Billa urged tourism stakeholders to actively communicate their concerns to policymakers. He emphasised that industry participation is crucial to shaping policies that drive growth. Encouraging states to adopt an entrepreneurial approach, he stressed the need for tourism to contribute beyond its current 5.04% of GDP. These policy changes aim to position India as a premier global tourism destination.