Union Budget 2025 Expectations
New Delhi, January 2025: Anticipation is running high in the industry as Finance Minister Nirmala Sitharaman prepares to announce the Union Budget 2025. Industry stakeholders are pinning their hopes on measures to revive growth, including GST rate reductions, infrastructure investments, and sector-specific tax incentives.
The finance minister concluded her Pre-Budget Consultations with industry leaders, unions, and representatives on January 6, paving the way for the Budget 2025-26 announcement. The first phase of the Parliament’s Budget session is scheduled from January 31 to February 13, 2025, followed by the second phase from March 10 to April 4, 2025.
Nirmala Sitharaman’s 8th Budget Speech
In Sitharaman’s eighth Budget speech, the hospitality and the travel & tourism industry is hoping for impactful announcements that address their challenges post-pandemic, such as:
- Increased allocations for tourism infrastructure: To boost domestic and international travel, particularly in Tier 2 and Tier 3 cities.
- Lower GST rates: Especially for the F&B sector, to enhance affordability and consumer spending.
- Support for sustainable tourism: Incentives for eco-friendly hospitality projects and green certifications.
- Skill development and employment generation: Initiatives to address the manpower crunch in hospitality and F&B sectors.
This will be Sitharaman’s second full-fledged Budget in Modi 3.0 and her eighth overall presentation. Over the years, her focus on fiscal reforms and industry-centric measures has been critical in shaping India’s economic landscape. For the industry expectations are high for policies that stimulate growth, encourage investments, and improve ease of doing business.
Industry Leaders Voice Pre-Budget Expectations:
Yogesh Mudras, Managing Director of Informa Markets in India:
As Budget 2025 approaches, the travel and tourism sector remains optimistic about initiatives to accelerate growth and recovery, given its critical role in India’s economy. Contributing 7% to the GDP and supporting over 39 million jobs, the sector is poised to drive substantial economic growth. With India projected to reach a $125 billion tourism market by FY27, targeted measures are essential to unlock its full potential. Infrastructure development, including investments in airports, roads, railways, and public transportation networks, is vital to improving connectivity and accessibility for both domestic and international travellers. Simplifying GST for the hospitality and aviation sectors, extending financial support to MSMEs—the backbone of the industry—and streamlining visa processes to attract digital nomads can further bolster growth. Introducing incentives for smart tourism and encouraging the adoption of technologies such as AI, blockchain, and IoT will enhance traveller experiences and operational efficiency. Sustainability must also take center stage. Dedicated funds for eco-friendly infrastructure, waste management, and community-led tourism initiatives can foster a more sustainable travel ecosystem. Mahakumbh 2025 in Prayagraj presents a unique opportunity to showcase India’s tourism potential. With a proposed budget of ₹6,990 crore, Mahakumbh is projected to generate approximately ₹25,000 crore in revenue and attract an estimated 400 million visitors. The event is expected to boost local trade, tourism, and employment, with accommodation and tourism sectors benefiting significantly, potentially generating ₹40,000 crore. By capitalsing on such events and sustained infrastructure investments, India can strengthen its position as a global travel leader. With domestic tourism driving 14.8% revenue growth and the opportunity to position India as a $4 trillion tourism economy by 2047, Budget 2025 is a pivotal moment to chart a course toward a thriving, sustainable, and globally competitive travel and tourism industry.
Ambika Saxena, Group CEO of TWH Hospitality:
The travel and hospitality industry expects the forthcoming budget to introduce measures for its growth. We expect the government to strengthen domestic tourism initiatives and increase budgetary allocation to promote tourism, especially in emerging destinations. Additionally, policies to attract international tourists and support skill development in hospitality will strengthen India’s position as a global travel destination. Such measures would boost employment, attract investments, and contribute significantly to the country’s GDP.
Vinesh Gupta, General Manager, The Den Bengaluru :
As we approach the 2025 Union Budget, the hospitality industry remains optimistic about reforms that can drive sustainable growth. Rationalizing GST slabs, particularly to further streamline the sector, would not only enhance competitiveness but also encourage greater domestic and international tourism. Additionally, reducing the complexity of the taxation structure can ease operational challenges and improve affordability, making India an even more attractive destination for travellers. Furthermore, initiatives like investing in infrastructure are vital to unlocking the potential of offbeat and emerging destinations.
At The Den, we believe that the government will continue prioritizing skill development initiatives aimed at empowering local communities. A well-trained workforce is crucial for delivering world-class hospitality experiences, and such initiatives can create meaningful employment opportunities while fostering inclusive growth. With the hospitality industry projected to grow significantly in the coming years, these measures can position India as a global leader in tourism, ensuring long-term benefits for businesses, travellers, and communities alike.
Sumit Prakash, Country Director, India and South Asia, Collinson International:
India’s travel sector has shown a strong recovery over the past year, with both its domestic and outbound travel surpassing 2019 levels. It is an exciting period for India’s aviation and tourism sectors as the country continues to advance with significant infrastructure improvements and developments.
This includes investment channelled into increased airline capacity and airport development. The expansion of flight routes and the enhancement of regional airports will improve connectivity and make air travel more accessible.
India’s commitment to uplifting the travel sector, coupled with the growing demand for travel experiences, significant opportunities for brands are arising, particularly within the financial services sectors, to design strong travel-experience propositions that deepen engagement with valued consumers.
With the upcoming Union Budget 2025, we look forward to the strategic measures that will be put in place to further support the industry. We remain optimistic that enhanced developments in this area will boost not only the growth of the tourism and aviation sectors, but also positively impact businesses that are operating in India.
Saurabh Wadkar, Founder, Rooted:
The Union Budget 2025 offers a golden opportunity to uplift India’s restaurant and food delivery sector, especially for small businesses that are the heart of this industry. Reinstating Input Tax Credit (ITC) under GST could provide much-needed relief by lowering operational costs and boosting profitability for countless restaurants and cloud kitchens.
A reduction in GST rates to 12% for restaurants and delivery services would make pricing more competitive and align with global standards, giving businesses a stronger edge. Recognizing ghost kitchens and food delivery ventures with infrastructure status could open doors to affordable loans and tax benefits, helping entrepreneurs thrive in smaller cities and towns.
Encouraging the adoption of technology through incentives could empower small players to streamline operations, cut costs, and grow sustainably. Additionally, celebrating regional cuisines through culinary tourism initiatives would not only boost local restaurants but also highlight India’s incredible food heritage.
With thoughtful measures like these, the Budget could transform the sector, creating opportunities for small businesses to flourish and strengthening their role as drivers of jobs, culture, and economic growth.
Naina Parekh, Founder, EUME:
The Union Budget 2025 presents a unique opportunity for the Modi 3.0 government to prioritize initiatives that can catalyze the growth of the travel and tourism sector. Beyond ongoing infrastructure projects, it is essential to allocate specific funds for smart tourism solutions, such as digitizing tourist experiences and enhancing public transportation networks to improve accessibility for domestic and international travellers.
Policy measures that encourage niche tourism segments like wellness, adventure, and heritage tourism can help position India as a year-round travel destination. Also, the growing demand for travel accessories, including sustainable and ergonomic solutions, highlights the need for supportive measures. Reducing GST rates for manufacturers in this sector can promote innovation, make products more affordable, and establish India as a leader in the global travel accessory market. Such initiatives align with the government’s vision of building a vibrant, inclusive, and self-reliant economy.
Sandeep Arora, Director of Brightsun Travel, India:
We are optimistic about the upcoming budget for 2025. The tourism sector plays a significant role in driving the nation’s economic growth, and we 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 country’s rich cultural heritage.
Another 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 long-term growth of the travel sector.
Overall, we look forward to a budget that empowers the tourism industry to continue its role in strengthening the economy and creating new opportunities for businesses and communities alike.
Simranjeet Singh, Director, CYK Hospitalities:
The upcoming Union Budget 2025 is quite expected to have reforms for innovation. For start-ups and food and beverage (F&B) sectors, there is also great hope for simplified taxation, namely GST rate cuts on small eateries and essentials will ease financial stress. A very strong push has been made towards subsidies on packaging that preserve the environment so that food becomes scarce, aligning it with the perceptions of global sustainability. Increased budgetary support to food processing facilities might as well drive off multiple rural jobs and boost exports. Start-ups are also demanding continued tax exemptions and the removal of angel taxes so as to attract more funding. Investments into Tier 2 and Tier 3 cities will benefit from policy environments that promote digital ecosystems to stimulate innovation, especially in agri-tech, health-tech and green-tech.
Nidhi Singh, Co-Founder, Samosa Singh:
Being an F&B brand dedicated to prioritizing quality and innovation, we look forward to the Union Budget 2025 reforms that may vicariously fuel the growth of startups about the former. Swiftly approved policies that would potentially simplify taxation, and promote sustainable business practices can act as promoters for escalating startups like ours. The F&B sector being in the focus, stimuli for local sourcing, reduced taxes on essential supplies, and facilitated support for cold-chain infrastructure can result in significantly impacting operational efficiency and product quality constructively. We hope that the implementation of this budget would make provisions for a far more resilient and thriving startup ecosystem, and be the breath of prerequisite fresh air.
Vikesh Shah, Founder, 99 Pancakes:
At 99 Pancakes, we are committed to redefining the QSR dining experience & we are hopeful about the Union Budget 2025 to address key growth enablers for our F&B Industry. This sector has been brawling with inflating operational & input costs. A reduction in GST on dining services along with a tax alleviation on sustainability packaging could be of crucial assistance.
Scalability & Market Expansion could be the necessary impact driven from adopting advanced kitchen technologies leading to operational efficiency.
Such robust measures accredit brands like ours to continue striving towards innovation, amplifying customer experience & contributing to our country’s economic momentum.
Navneet Nagpal, Principal Consultant and Director, Spectra Hospitality Services:
I urge the government to leverage Union Budget 2025 as a pivotal opportunity to address key challenges and unlock growth in the hospitality and tourism sectors. Restoring the GST Input Tax Credit for restaurants can reduce operational costs, while revisiting the Reverse Charge Mechanism on commercial leases would ease financial burdens. Rationalizing GST by merging the 18% slab for room tariffs above ₹7,500 with the 12% category will boost domestic and inbound tourism, making travel more accessible. Granting infrastructure status to hotels and convention center projects with a reduced threshold of ₹10 crore can catalyze smaller developments, which form the backbone of India’s hospitality landscape.
Additionally, prioritizing skill development initiatives tailored for hospitality, incentivizing digital transformation, and supporting sustainable tourism practices will future-proof the sector. Simplifying access to credit with favorable loan structures for SMEs can further foster entrepreneurship and job creation. Together, these measures can spur innovation, drive sustainable growth, and firmly position India as a global leader in hospitality and tourism.
Vishal Puri, Co-Founder, Spalba:
The hospitality industry, a key driver of India’s economic growth, is poised to expand, but it needs substantial support to overcome operational challenges. The upcoming budget must prioritize simplifying GST compliance to streamline operations and foster business growth across the sector. Additionally, the introduction of mandatory sustainability practices, including energy-efficient construction and waste management, will not only help the industry become greener but also more competitive. Tax incentives for renewable energy adoption in hotels and resorts would further reduce costs while promoting eco-friendly operations.
However, the focus shouldn’t be solely on physical infrastructure. India must also prioritize the development of digital infrastructure to bridge existing gaps and drive growth. Digital twin technology, which creates virtual replicas of physical assets, offers a transformative opportunity for the hospitality and tourism industry. By incentivizing the adoption of digital twins for infrastructure management, hotel chains can optimize their operations, improve customer experiences, and enhance sustainability. The budget should prioritize these e-infrastructure technologies, with robust intellectual property protection and their mandated use in government events and projects. This would spark innovation within the hospitality sector and set the stage for sustainable urban development. A balanced approach that merges sustainability, digital transformation, and regional growth will ensure the hospitality sector thrives while contributing to a smarter, greener India.