The Union Budget 2025 has placed tourism and hospitality at the forefront of its growth strategy, introducing several transformative measures that promise to reshape the industry and boost its global competitiveness.
One of the most significant announcements is the development of 50 top tourist destinations under challenge mode. This initiative, coupled with streamlined e-visas and visa-free access for select international tourists, is expected to significantly increase inbound travel, enhancing India’s appeal as a global tourism hub. The inclusion of new hotels in these destinations under the infrastructure harmonized list (HML), where land is provided by state governments, marks another crucial step. Hospitality investors can now avail infrastructure lending at more favorable terms, with enhanced limits and access to larger funds via External Commercial Borrowings (ECBs).
Connectivity also takes center stage in this year’s budget, with a modified UDAN scheme aimed at connecting 120 additional destinations. This initiative, alongside the development of helipads in the Northeastern region, will open up remote but picturesque destinations to travelers. These measures are expected to drive significant growth in tourist footfall, particularly in underexplored regions of the country.
The government’s focus on the Buddhist Circuit is another noteworthy highlight. By investing in infrastructure and promoting these culturally significant sites, the plan creates a lucrative opportunity for the hospitality sector to develop premium accommodations and curated travel experiences. This will cater to both domestic and international travelers, further strengthening India’s position as a spiritual and cultural tourism hotspot.
Moreover, the budget addresses the need for skill development and community involvement in tourism. With enhanced initiatives through Institutes of Hotel Management (IHMs) and financial support for homestay businesses via Mudra loans, the government aims to foster high-quality services while empowering local communities to play an active role in the tourism ecosystem.
Industry leaders have lauded these initiatives.
Sarbendra Sarkar, Founder & MD, Cygnett Hotels and Resorts
“The Union Budget’s strategic emphasis on tourism is a welcome move that will significantly boost India’s hospitality industry. The development of 50 key destinations under challenge mode, along with streamlined e-visas and visa-free access for select tourist groups, will drive international footfall and enhance India’s global appeal. The government’s initiative to include new hotels coming up in 50 key destinations in the infrastructure harmonized list (HML) for projects where land will be provided by the state governments is a welcome step. This will help hospitality investors to avail infrastructure lending at easier terms with enhanced limits and offer access to larger amounts of funds as External Commercial Borrowings (ECBs).
The government’s plan to introduce a modified UDAN scheme for strengthening connectivity to additional 120 destinations and supporting helipads development in northeastern region will help to connect potential tourist destinations in the region.
Particularly, the focus on the Buddhist Circuit presents immense opportunities for hospitality expansion. With greater infrastructure and promotion around these culturally significant sites, we see strong potential to develop quality accommodations and travel experiences in these regions, catering to both domestic and international travelers.
Additionally, skill development initiatives through IHMs and financial support for homestays via Mudra loans will strengthen the sector, ensuring high-quality service and deeper community involvement in tourism growth. Cygnett Hotels is keen to align with these initiatives, expanding our footprint in high-growth destinations and playing a pivotal role in India’s tourism success story.”
Simranjeet Singh, Director, CYK Hospitality
“The Union Budget 2025 marks the beginning of substantial financial reforms that are going to reshape the F&B consultancy and hospitality sectors. The expansion of credit guarantee coverage will provide better financial support for startups and small enterprises, reducing risks while paving the way for innovation. The strengthening of the role played by financial institutions will provide much-needed support toward funding early ventures to scale up quickly in the hospitality and food businesses.
The establishment of a dedicated startup credit ecosystem is a game changer, particularly for first-time women entrepreneurs and businesses from SC and backward communities, creating a larger scope of participation in the industry. In addition, simplifying access to credit could be a boon in itself, particularly with schemes such as the ₹2 crore loan initiative for women entrepreneurs that would encourage newer ventures and diversify and promote inclusivity in the F&B space.
It is in this context that the sector expects accelerated growth, decked in furtherance of enhancement of supply chains, going into the promotion of regional cuisines, and the development of the agriculture sector, all of which pave the way. “
Ritwik Khare, Founder and CEO, ELIVAAS
The Union Budget 2025 provides a significant boost to tourism and hospitality, with plans for the development of 50 top destinations and enhanced infrastructure. This presents exciting opportunities for us to redefine luxury villa experiences, not only in popular tourist hotspots but also in offbeat and emerging destinations across India and the world. The government’s focus on improving connectivity through the Udaan scheme and easing visa facilitation will help elevate India’s position as a top global travel destination, ensuring seamless travel experiences for high-end tourists. The Budget’s emphasis on supporting startups through simplified regulations and increased access to funding will further enable our growth. As a startup in the luxury hospitality sector, these initiatives will strengthen our ability to innovate and offer exceptional vacation rentals in both renowned and hidden gems. We support the government’s push for local employment and the development of hyper-local tourism to tap into the rich diversity of India, boosting local economies while offering travelers unique cultural experiences. We welcome these initiatives and look forward to curating exceptional stays that align with India’s growing appeal on the global tourism map.
Pardeep Kumar Siwach, DGM- Mayfair Spring Valley Resort.
The government’s renewed focus on infrastructure, connectivity, and spiritual tourism aligns with our commitment to providing world-class hospitality in one of India’s most scenic and culturally significant locations—Northeast’s Assam. The emphasis on developing top destinations and the inclusion of hotels in the harmonized infrastructure list will further strengthen the hospitality sector. Additionally, the promotion of medical tourism and the ‘Heal in India’ initiative will position India as a global wellness hub, attracting travelers seeking rejuvenation and holistic healing. We are excited about the potential tourism growth, especially with the focus on seamless travel experiences, destination-led employment generation, and a growing interest in wellness retreats and medical tourism.
Jatinder Paul Singh, CEO and Co founder, Viacation
The Union Budget 2025’s focus on enhancing tourism infrastructure, improving connectivity, and supporting adventure tourism provides a promising outlook for experiential travel in India. The Budget’s dedication to supporting startups through access to funding, ease of doing business, and the promotion of innovation aligns perfectly with our mission to democratize adventure travel. The government’s renewed focus on local employment through tourism and the development of new destinations further supports our goal of making adventure tourism more sustainable and inclusive. The promotion of medical tourism and the ‘Heal in India’ initiative positions India as a global wellness hub, attracting travelers seeking rejuvenation and holistic healing. We are particularly excited about the potential for growth in the tourism sector, with a strong emphasis on seamless travel experiences and the creation of destination-led employment. We look forward to expanding our reach, offering responsible tourism, and providing unique adventure-filled journeys in some of India’s most scenic and culturally significant locations, aligned with the growing interest in wellness retreats and medical tourism.
Krishna Rathi, Senior Country Director, India Subcontinent and MEA at Agoda,
“Agoda acknowledges and celebrates India’s exciting potential as a top travel destination and is enthusiastic about the tourism plans announced in this year’s Union Budget. The investment in recent years in infrastructure enhancements and destination marketing is undeniably paying off. At Agoda, we see this reflected in a 22% year-on-year increase in inbound accommodation searches to India. With this year’s announced investments in the expansion of the UDAN scheme to connect 120 new destinations, enhanced support for homestays, and the development of top tourist destinations in collaboration with state governments, we’re hopeful that India will be able to sustain this momentum. Especially as this comes on top of continuing positive trends like visa easements and inspirational destination marketing campaigns promoting India’s diverse experiences and attractions.”