Industry welcomes Budget’s focus on tourism sector, calls it growth driver

Rationalisation of Tax Collected at Source 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.

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 II and III cities, including temple-towns, through the city economic regions (CER) development budgetary allocation of Rs 5,000 crores will act as a big boost for the tourism sector, top industry players said. Rationalisation of Tax Collected at Source (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. This year's budget has taken steps to make international travel, both outbound and inbound, more accessible and affordable for Indian travellers. The proposal to reduce the TCS rate on overseas tour packages to a flat 2 per cent (from the earlier 5 per cent and 20 per cent slab-based system) is a welcome move for making outbound tourism more amenable, according to Ixigo. Cox & Kings Director Karan Agarwal said, ''Outbound travel needed a course correction, and cutting TCS on foreign tour packages to 2 per cent does exactly that, it takes away the friction that travellers were feeling every time they planned a trip.'' Zostel and Zo World CEO Aviral Gupta said the proposed Rs 12.2 trillion capital expenditure across roads, railways, airports and regional connectivity will significantly improve access to heritage, mountain, coastal and emerging tourism circuits. The focus on experience quality through the training of 10,000 certified tourist guides, investments in hospitality education, and the development of 15 archaeological and cultural sites into experiential destinations marks a clear shift towards value-led tourism, which aligns closely with rising demand for trekking, hiking and nature-led travel, improved connectivity to remote and coastal regions, and destination development across Himachal Pradesh, Uttarakhand, Jammu and Kashmir, the Western Ghats and coastal India, he said. ''Together, the measures on medical tourism will encourage more international tourists to visit India, support employment and local entrepreneurship, and showcase the country's natural and historical richness on a global stage,'' he added. Thomas Cook (India) Managing Director and Chief Executive Officer Mahesh Iyer said, the Union Budget 2026 reflects a strong recognition of tourism as a strategic pillar for economic growth, employment generation, and regional development. ''Overall, the Budget reinforces tourism's role in driving inclusive growth; however, a higher marketing outlay towards promoting Incredible India could have delivered a powerful double-barrel impact by complementing infrastructure development with stronger global visibility,'' Iyer said.

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