Budget 2026: Travel Industry Pushes For GST Relief, Infrastructure Status And Better Connectivity

What The Travel Industry Expects From Union Budget 2026

As the Union Budget 2026 approaches, the travel and aviation industry finds itself at a familiar crossroads, looking back at incremental gains while hoping for bolder moves to keep pace with India’s rapidly evolving travel appetite. Last year’s Budget laid the foundation for connectivity and access, signalling the government’s continued belief that travel infrastructure is not just a tourism enabler but a driver of economic and regional growth.

A key highlight of Budget 2025–26 was the renewed thrust on regional air connectivity through the modified UDAN scheme. With an ambitious plan to connect 120 new destinations over the next decade and carry an estimated four crore additional passengers, the emphasis was on bringing smaller cities and remote regions into India’s aviation map. While the Budget stopped short of announcing specific routes or airlines, the intent was clear: make flying more accessible beyond metros, and encourage airlines to expand networks that were earlier considered commercially unviable. For travellers, this quietly translated into better access to emerging destinations and shorter travel times within the country.

The Budget also offered indirect relief to travellers, particularly those flying abroad. By increasing the threshold for Tax Collected at Source (TCS) under the Liberalised Remittance Scheme from Rs 7 lakh to Rs 10 lakh, the government eased the upfront tax burden on international travel spending. Alongside this, continued investments in airport infrastructure, including new greenfield and brownfield airports, signalled a long-term vision for capacity expansion rather than immediate fare intervention.

As travel demand continues to surge across leisure, business, and experiential segments, these measures set the stage but also highlight what remains unaddressed. With Budget 2026 on the horizon, the industry is now looking for policies that go beyond connectivity, towards affordability, sustainability, and global competitiveness. The question is no longer whether Indians want to travel, but how seamlessly and affordably the system can support that ambition.

What the Industry Is Looking for from Budget 2026

If last year’s Budget was about strengthening the backbone of connectivity, Budget 2026 is being seen as a moment to deepen and refine India’s travel ecosystem, making it more affordable, competitive, and globally aligned. Across travel platforms, tour operators, hospitality groups, and mobility providers, there is cautious optimism that the government will now address long-standing structural issues that affect ease of doing business and traveller affordability.

Online travel platforms, which are closest to consumer behaviour, highlight the importance of continuity in destination development and infrastructure investment. Rikant Pittie, Co-founder and CEO of EaseMyTrip, notes that recent policy signals have helped reinforce confidence within the sector. He highlights the government’s focus on iconic destinations and island infrastructure as a long-term enabler of sustainable tourism growth, while stressing that further steps such as granting infrastructure status to hospitality, rationalising GST across hotels and restaurants, and increasing overseas marketing spends could significantly accelerate tourism-led economic growth and employment generation.

For large tour operators, the conversation is shifting from demand stimulation to operational simplification. Vishal Suri, Managing Director & CEO of SOTC Travel, believes Budget 2026 offers an opportunity to strengthen the sector’s foundations through procedural reforms. He points to the need for GST simplification through centralised registration and seamless reporting, along with a flat one per cent TCS structure to replace the current multi-tier system. According to him, such measures would improve liquidity for travellers and create a clearer audit trail without discouraging outbound travel.

Mahesh Iyer, Managing Director & CEO of Thomas Cook (India), echoes the call for industry or infrastructure status, notably to support MSMEs that form the backbone of India’s travel sector. He emphasises that access to affordable institutional credit, combined with targeted investments in underserved regions, spiritual destinations, and Tier II and III cities, could unlock the next phase of tourism growth. Strengthening inbound tourism, he adds, will also require enhanced visa facilitation, incentives for niche segments like medical and MICE tourism, and a renewed global push for the Incredible India campaign.

Taxation, especially around overseas travel, remains a recurring concern. Akansha Agarwal, Co-founder and CMO of Int2Cruises, notes that cruise holidays often fall into higher TCS brackets due to bundled costs, including flights, visas, and accommodation. She suggests treating cruise holidays separately from overseas tour packages, similar to international air tickets, to reduce upfront cash outflow and encourage early bookings in a segment with strong growth potential.

In the corporate travel and events space, operational efficiency remains top of mind. Vinod Kumar Sah, CTO and Co-founder of CoTrav, highlights the need for smoother GST input credit mechanisms, noting that delayed credits often create liquidity bottlenecks. He also calls for more straightforward guidelines around bundled services and multi-vendor billing, which are central to corporate travel, to reduce compliance friction and reward businesses that maintain transparent, audit-ready systems.

Beyond aviation and hotels, intercity mobility providers are also watching the Budget closely. Manish Rathi, Co-founder and CEO of IntrCity SmartBus, believes India’s intercity travel ecosystem is at an inflection point, with growing preference for organised, experience-led bus travel. While highway development remains critical, he says the next phase must focus on passenger infrastructure such as modern, airport-style bus terminals to improve safety, reliability, and confidence in shared mobility. In the rail sector, Rathi, in his role as Co-founder and CEO of RailYatri, adds that the emphasis should now shift toward seamless multimodal integration, where rail, bus, and urban transit systems work together to enable predictable, end-to-end journeys.

From a policy and financing perspective, Arun Bagaria, CEO & Co-founder of TravClan, underscores the need for access to institutional credit tailored to travel-specific cash cycles. He notes that while the sector shows strong revenue visibility and low default risk, traditional lending frameworks often fail to recognise booking-led cash flows and extended settlement cycles, constraints that limit scale and formalisation.
Industry associations have been even more direct in their expectations. Ravi Gosain, President of IATO, reiterates that inbound tourism remains an under-leveraged source of foreign exchange and employment.

He advocates recognising tourism as an export sector, rationalising GST to improve price competitiveness, increasing overseas marketing budgets, and incentivising airlines to connect lesser-known cities. Similar priorities are echoed by Aashish Gupta of FAITH, who stresses the urgency of global branding for Incredible India, infrastructure status for hotels, rationalised TCS on outbound travel, and destination development based on carrying capacity.

Ratings and research firms also expect continuity in connectivity-led growth. Kinjal Shah, Senior Vice President and Co-Group Head at ICRA, anticipates that Budget 2026 will reiterate its focus on UDAN, airport expansion, medical tourism, and e-visa streamlining to support both domestic and international travel demand.

Across hospitality, the call for infrastructure status is near-unanimous. Leaders from Rajat Sethi, Cluster General Manager, Fairmont and Raffles Jaipur; Dhinesh Kumar, Director of Finance, Sheraton Grand Chennai Resort & Spa; Kush Kapoor, CEO, Roseate Hotels & Resorts; Shwetank Singh, Executive Director, Chalet Hotels Limited; Ajay K. Bakaya, Chairman, Sarovar Hotels & Director, Louvre Hotels India; Jai Sreedhar, Joint Managing Director & CEO, Rosetta Hospitality; Col. Manbeer Choudhary, CMD, Noormahal Group; Pushpendra Bansal, COO, Lords Hotels & Resorts; Davinder Juj, General Manager, Eros Hotel New Delhi; and Sanat Hooja, Partner, Machan Resorts, emphasise that hotels are capital-intensive assets with long gestation periods, yet remain excluded from benefits routinely extended to other infrastructure sectors. Granting infrastructure status, they argue, would unlock long-term financing, support expansion into Tier II and III destinations, improve service quality, and create large-scale employment.

Sustainability is another thread running through expectations. From solar energy adoption in resorts to incentives for green buildings, EV fleets, and eco-friendly operations, hospitality leaders such as Dhinesh Kumar of Sheraton Grand Chennai Resort & Spa, Rajesh Loomba of ECOS (India) Mobility & Hospitality, and Sanat Hooja of Machan Resorts stress that targeted incentives can align tourism growth with India’s climate goals.

Taken together, the industry’s message ahead of Budget 2026 is clear: travel demand is strong, diversified, and increasingly experience-driven. What the sector now seeks is policy clarity, tax rationalisation, recognition of infrastructure, and integrated connectivity. These measures can convert momentum into long-term value and position India as a truly competitive global travel destination.

What Budget 2026 Needs to Deliver

As India stands on the cusp of becoming one of the world’s most dynamic travel markets, Budget 2026 carries the responsibility of converting momentum into long-term structural strength. The demand story is already written: Indians are travelling more frequently across broader geographies and with higher expectations. What now needs equal attention is the ecosystem that supports this movement.

At its core, the industry is asking for recognition of tourism as an economic engine, of hospitality as infrastructure, and of mobility as an enabler of productivity and regional development. Simplified taxation, predictable credit access, and streamlined approvals are not just operational asks; they are prerequisites for sustainable scale. Equally important is the need for integrated connectivity, where airports, railways, highways, buses, ports, and last-mile transport function as part of a single, traveller-centric network.

Budget 2026 also has the opportunity to sharpen India’s global positioning. Stronger overseas marketing, easier visa regimes, and focused promotion of niche segments, from wellness and culture to cruises and experiential travel, can help India compete more effectively for high-value international travellers. At the same time, targeted incentives for sustainability, digital adoption, and skilling can ensure that growth is both responsible and inclusive.

Ultimately, the success of Budget 2026 for the travel industry will not be measured solely by allocations, but by intent. A Budget that aligns policy clarity with ease of doing business, balances affordability with aspiration, and recognises tourism’s multiplier effect across employment and regional economies can redefine India’s travel narrative, not just as a destination to visit, but as an ecosystem built to welcome the world.