New Delhi, February 2025: Union Finance Minister Nirmala Sitharaman announced a transformative initiative to develop 50 destinations into global tourism hubs as part of the Union Budget 2025, signalling a major thrust to boost India’s tourism sector. The proposal, backed by a 246% increase in the tourism ministry’s budget allocation to ₹2,541.06 crore for 2025-26 (up from ₹850.36 crore in 2024-25), aims to position India as a premier destination for cultural, spiritual, and medical tourism.
Employment-Led Growth and State Collaboration
In her budget speech, Sitharaman emphasized a “challenge mode” approach, requiring states to contribute land for infrastructure development. “The government’s approach to tourism will focus on employment-led growth, leveraging India’s cultural heritage and natural diversity,” she stated. The initiative will prioritize public-private partnerships and skill development to generate jobs across hospitality, transport, and local artisan sectors.
Key Initiatives Announced
The budget outlines several measures to drive tourism:
- MUDRA Loans for Homestays: Extending financial support to homestays and small hospitality enterprises.
- E-Visa Expansion: Facilitating e-visas and fee waivers for select tourist groups to ease entry barriers.
- ‘Heal in India’ Program: Promoting medical tourism through streamlined infrastructure and global outreach.
- Buddhist Circuit Development: Upgrading heritage sites linked to Buddhism to attract international pilgrims.
- Infrastructure Status for Hotels: Hotels should be included in the harmonized infrastructure list to spur investment.
Infrastructure Funding Surges
The Swadesh Darshan scheme, focused on thematic tourism circuits, received a monumental boost with its allocation soaring to ₹1,900 crore (from ₹350 crore in 2024-25). The PRASHAD scheme for pilgrimage tourism retained its allocation at ₹240 crore. Union Tourism Minister Gajendra Singh Shekhawat affirmed that the “top 50 destinations will be developed in collaboration with states,” with hotels in these hubs gaining infrastructure status for faster approvals and funding.
Top 50 tourist destination sites in the country will be developed in partnership with states through a challenge mode.
Land for building key infra will have to be provided by the state. Hotels in these destinations will be included in the infrastructure -harmonized list.
– Smt… pic.twitter.com/mBUlWi3GZ1
— Gajendra Singh Shekhawat (@gssjodhpur) February 1, 2025
Triangulation Strategy for Tourism
Tourism Secretary Mugdha Sinha highlighted the three-pillar strategy:
- Destination Development: Enhancing attractions through sustainable and tech-driven upgrades.
- Accommodation Expansion: Leveraging infrastructure status for hotel projects.
- Accessibility: Enhancing regional connectivity via the UDAN scheme and relaxed visa norms.
Industry Reactions and Vision
Shylender Jindal, the Managing Director at SKIL Travel:
With the government focusing on promoting India as a global tourism hub, this budget lays a strong foundation for tomorrow. The push for green energy and sustainable development aligns well with the hospitality industry’s shift toward eco-conscious operations. Additionally, the expansion of visa waivers and digital tourism platforms can significantly impact international travel inflows. However, to truly capitalize on this momentum, we believe a structured framework for tourism incentives and easier access to credit for hospitality businesses will be crucial.
Louis D’souza, Director at Tamarind Global:
The Union Budget 2025 has brought upon promising developments for the hospitality and tourism industry, especially with the government’s push toward infrastructure enhancement and destination development. The allocation of resources for iconic tourism sites and increased regional connectivity will significantly boost domestic and inbound travel. However, the industry was anticipating more structured incentives for the MICE sector and tax relaxations that could encourage more private investment. With the continued focus on spiritual tourism and sustainable tourism, we see an opportunity to curate experiences that align with the travellers’ preferences.
Prabhakar Kamat, Business Head at Red Dot Representations:
India’s focus on developing tourism as a major economic driver is evident in this year’s budget. Expanding rail and road networks and introducing new tourism circuits will unlock opportunities across various travel segments. While this is a strong foundation for growth, we believe that increased marketing and promotional efforts on the global stage, alongside ease of doing business in the travel sector, could enhance India’s competitiveness. A more structured approach to tourism incentives could also accelerate investment in this sector.
Ambika Saxena, CEO, TWH Hospitality:
This year, the government has presented a well-balanced and growth-oriented budget, specifically supporting the tourism and hospitality sectors. The modified Udaan scheme will open doors for the hospitality sector by bringing new tourist destinations into the spotlight. Hotels, resorts, and homestays in unexplored regions will see a surge in demand, encouraging further investment and development. With the government’s push for connectivity and including new 120 destinations, we expect a stronger pipeline in the hospitality sector, catering to both business and leisure travellers in emerging tourism hotspots.
Yogesh Mudras, Managing Director of Informa Markets in India:
The Union Budget 2025 presented a progressive roadmap that prioritises infrastructure, economic growth, and regional connectivity. The government’s continued emphasis on regional development and tourism-friendly policies will have a far-reaching impact on multiple sectors, including travel and tourism. The modified Udaan scheme, in particular, is a landmark initiative that will strengthen India’s position as a global tourism hub. The scheme has already benefited 1.5 crore middle-class travellers, and the expansion of the scheme to include 120 new destinations is a game-changer for regional connectivity. With increased accessibility, we anticipate a surge in domestic tourism and business travel, providing a major boost to the tourism industry.
Navneet Nagpal, Principal Consultant and Director, Spectra Hospitality Services:
This year’s Union Budget marks a significant turning point for India’s tourism sector, particularly in attracting foreign travellers—a segment that has long needed greater focus. The introduction of visa-free access for select countries and streamlined e-visa processes will play a crucial role in enhancing inbound tourism, positioning India as a more accessible and attractive global destination.
The announcement of 50 key destinations to be developed under the challenge mode is a transformative step. By curating world-class experiences and investing in infrastructure, India can strengthen its appeal as a premier hub for leisure, heritage, and experiential tourism. Additionally, the renewed emphasis on Buddhist Circuit tourism is a strategic move to boost footfall from Southeast Asian countries, tapping into an underutilized yet high-potential market.
Equally important is the government’s focus on skill development through IHMs and financial support for homestays via Mudra loans. These initiatives will not only elevate service standards but also create meaningful economic opportunities at the grassroots level, fostering a more inclusive tourism ecosystem.
With this renewed strategic push for foreign tourism, India’s hospitality sector is poised for accelerated growth, increased revenue generation, and a stronger presence on the global tourism map. The emphasis on public-private partnerships (PPP) and incentive-linked support for tourism infrastructure further strengthens the industry’s long-term sustainability and competitiveness.
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 an additional 120 destinations and supporting helipad development in the 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 travellers.
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.
Ashok Vashist, Founder and CEO, WTiCabs:
The expansion of regional connectivity under the UDAN scheme, with 120 new destinations, presents a significant opportunity for WTi Cabs/people mobility Industry to enhance its airport transfers, intercity travel, and last-mile connectivity. Simultaneously, customs duty adjustments supporting EV manufacturing—including exemptions on 35 additional capital goods—will lead to improved technology and lower vehicle acquisition costs. These initiatives will further strengthen WTi’s/ people mobility industries sustainability goals by enabling a smoother transition to electric mobility while leveraging solar-powered EV charging infrastructure, ensuring an eco-friendly and cost-effective transportation network.
