The Union Budget 2026 has drawn strong reactions from leaders across hospitality, tourism, real estate and allied sectors, with a common emphasis on skill development, destination-led growth and improved regional connectivity as critical levers for India’s next tourism expansion phase.

Yogesh Mudras, Managing Director, Informa Markets in India (organisers of SATTE), highlighted the Budget’s long-term approach to strengthening tourism fundamentals.

"The Union Budget 2026 lays out a forward-looking roadmap with a clear focus on infrastructure, economic growth, and better regional connectivity. One of the standout announcements for the sector is the plan to set up a National Institute of Hospitality, a move that could really strengthen India's tourism and hospitality ecosystem in a meaningful way. By bringing academia, industry, and government onto the same platform, the institute has the potential to create a skilled workforce that matches the evolving expectations of both domestic and international travellers. For hospitality businesses, this could mean higher service standards, smoother operations, and a more reliable long-term talent pipeline. In the bigger picture, initiatives like this tend to build investor confidence, encourage the development of new hotels, resorts, and tourism infrastructure, and further support India's positioning as a global travel destination. While the industry was also hoping for wider policy measures to make investments easier and simplify operations, this strong push toward skill development still sets a solid foundation for more structured, long-term growth in tourism and hospitality."

A key Budget theme has been the structured development of 50 destinations in partnership with states, supported by enhanced connectivity to regions such as Himachal Pradesh and Kashmir. This, industry leaders note, signals a deliberate effort to decentralise tourism demand beyond saturated metros and established leisure hubs.

Nandini Taneja, Chief Executive Officer, Bhumika Enterprises, sees the Budget as particularly relevant for emerging cities and inclusive growth.

"The proposal to establish a National Institute of Hospitality is a timely step for India's hospitality sector, especially in Tier-2 cities emerging as key travel and business hubs. By bridging academia, industry, and government, the institute can help create a skilled local workforce — critical for the growth of hotels and tourism-led developments. Equally encouraging is the Budget's push for women-led entrepreneurship through community-owned SHE-Marts, which will give SHG-linked women structured retail access and a pathway to enterprise ownership. This strengthens grassroots economic participation while supporting more inclusive local economies."

She added that,

"Together, stronger talent pipelines and inclusive economic initiatives will enhance service standards, improve operational efficiency, and boost investor confidence, accelerating hospitality-led growth in emerging cities and preparing them for rising domestic and international tourism demand."

Framing the Budget through a market-expansion lens, Ambika Saxena, CEO, TWH Hospitality, emphasised tourism’s elevation as a core economic driver.

"The Budget signals a clear shift in positioning tourism as a core economic growth driver rather than a peripheral sector. The structured development of destinations, along with improved connectivity, will expand India's viable hospitality markets beyond established hubs. With stronger destination infrastructure and a more robust talent pipeline, the industry gains better long-term demand visibility, investment confidence, and the ability to scale sustainably."

From a broader travel and enterprise perspective, Mr. Aditya Pande, Group Chief Executive Officer, InterGlobe Enterprises, welcomed the Budget’s alignment with long-term national goals.

"The Union Budget outlines a strong, forward-looking roadmap toward a Viksit Bharat by 2047. We welcome the government's continued focus on strengthening India's travel, tourism, and hospitality ecosystem through improved connectivity, accessibility, and destination infrastructure. The emphasis on skill development, heritage, and ecotourism reflects a deep understanding of the sector's economic potential. These measures will boost demand, support local economies, and strengthen India's position as a global hub for high-quality hospitality and travel."

Beyond hospitality, the Budget’s ripple effects are also being felt in retail and lifestyle sectors. Abhinav Kumar pointed to the alignment between manufacturing, logistics and brand-led growth.

"The Union Budget 2026-27 lays out a forward-looking path for India's retail and fashion ecosystem, reinforcing domestic manufacturing, innovation and brand competitiveness. Initiatives like the integrated textile programme, mega textile parks, MSME support and improved logistics create a stronger, more resilient supply chain for domestic and global brands in our portfolio. By fostering expansion into Tier-II and Tier-III cities, enabling digital and financial infrastructure and supporting high-quality production, the Budget provides the roadmap for Brand Concepts to scale efficiently, innovate responsibly and strengthen India's position as a hub for future-ready fashion and lifestyle businesses"

Taken together, industry reactions suggest that while stakeholders were hoping for deeper policy simplification and faster investment clearances, the Budget’s focus on skills, destination development and connectivity lays a credible foundation for decentralised, sustainable growth across India’s tourism and hospitality landscape.

As expectations around Union Budget 2026 give way to industry analysis, voices from hospitality, food services, QSR and alco-beverage sectors are largely aligned on one message: talent development, destination-led tourism and access to long-term capital are welcome moves, but structural reforms remain a work in progress.

Pranav Rungta, Co-Founder & Director, Nksha Restaurant and Vice President, NRAI Mumbai, called the Budget a constructive step for hospitality while highlighting lingering gaps for restaurants.

"Budget 2026 is a positive step for India's hospitality sector. Announcements like the first-ever National Institute of Hospitality and structured skill development for tourist guides will strengthen service standards and prepare our workforce to meet growing domestic and international demand.At the same time, restaurants continue to face structural challenges such as GST on commercial leases, access to export incentives like SEIS and easier SME support. Addressing these challenges alongside rising tourism and dining demand is key to building a resilient, sustainable and globally competitive hospitality sector"

From the experience-led hospitality and brewing space, Teja Chekuri, Managing Partner – Ironhill, emphasised the Budget’s focus on people, destinations and capital as a meaningful combination.

"What stood out for me in today's Budget is the clear recognition that hospitality growth depends as much on people as it does on places. The focus on structured skill development programmes directly addresses one of the industry's most persistent challenges of finding and retaining trained talent across brewing, service, and operations.

Equally significant is the decision to develop the top 50 tourist destinations in a challenge mode, while bringing hotels in these locations under the harmonised master list. Easier access to long-term, lower-cost financing is a real unlock for hospitality and alcobev brands looking to expand responsibly.

For companies like ours, operating at the intersection of craft beer, dining, and experience-led hospitality, this creates the right conditions to scale with better talent on the floor, stronger destinations to grow into, and capital that supports quality, not shortcuts. If executed well, these measures can meaningfully elevate India's hospitality ecosystem and its global appeal."

Speaking from a food entrepreneurship lens, Pranavi Chekuri, FullStack Ventures & Co-Founder, Bhojanam, highlighted the Budget’s connection between agriculture, skills and hospitality retail.

"As a founder, building a hospitality retail brand rooted in traditional food and native grains, this Budget feels deeply personal. The government's focus on strengthening native crops from coconut, cashew, and cocoa to horticulture and region-specific produce, directly impacts farmers, and in turn, brands like ours that depend on resilient, local value chains. When farmers earn better and produce improves in quality and consistency, it elevates the entire food ecosystem.

Equally encouraging is the emphasis on upskilling across hospitality. Upgrading national institutions, strengthening apprenticeships, and targeted training programmes will help create a workforce that is more industry-ready and confident. For emerging brands, this is critical and not just for smoother operations, but for thoughtful expansion.

Taken together, these measures connect the soil to the storefront. They create opportunities to scale responsibly, generate jobs, and build food brands that are proudly Indian, sustainable by design, and globally relevant in ambition."

For emerging café and food brands, Meenakshi Kumarr, Chef & Founder of Anahata Cafe (Formerly Roots Cafe), pointed to inclusion, skilling and SME funding as strong signals.

"The Budget's focus on strengthening the hospitality and food & beverages ecosystem is a welcome step for emerging brands like Anahata Café. Upgrading the National Council for Hotel Management into a National Institute of Hospitality will help create a stronger talent pipeline by aligning academia with industry needs something the F&B sector has long required. The Divyangjan Kaushal Yojana is especially encouraging, as hospitality and food processing offer meaningful, task-oriented roles that can enable dignified and inclusive employment when supported by customised training. Additionally, the creation of a ₹10,000 crore SME Growth Fund, along with the Self-Reliant India Fund, will help to nurture SMEs. For women-led F&B and FMCG startups, access to equity capital and risk funding is critical to scaling operations and building resilient supply chains."

From the alco-beverage industry, Vidhatha Annamaneni, Co-Founder, Ironhill, viewed the Budget as a signal of gradual but inevitable competition.

"From the alcobev industry perspective, this Budget reinforces a reality the industry understands well that structural reform in alcohol will continue to be gradual, not dramatic. Keeping alcoholic liquor outside GST maintains the status quo, but the real signal lies elsewhere. The India–EU FTA and phased tariff reductions across spirits, wine, and beer point to a more competitive, globally aligned market over the next decade.

For Indian brands, this is both an opportunity and a wake-up call. Lower duties will raise the bar on quality, consistency, and brand-building, especially as premiumisation accelerates. The proposed reduction in TCS on alcohol sellers is also a practical relief, easing working capital pressures across the value chain.

What the industry needs next is predictability with rationalised customs structures and faster resolution of legacy disputes. As India's alcobev market scales toward ₹5.3 lakh crore, the winners will be brands that think long-term, invest in craft and compliance, and compete confidently on a global stage, not a protected one."

Looking at quick-service restaurants and mass expansion, Aayush Madhusudan Agrawal, Founder and Director, Lenexis Foodworks, highlighted the importance of infrastructure and tiered growth.

“The Union Budget 2026 reflects a strong commitment to sustainable growth, infrastructure-led development, and ease of doing business. For the QSR industry, the focus on Tier 2 and Tier 3 cities, logistics efficiency, and skilling creates a powerful foundation for the next phase of expansion. At Lenexis Foodworks, we see this as an opportunity to deepen our presence, strengthen our supply chains, and deliver greater value to consumers across India.”

Collectively, the responses reflect cautious optimism across hospitality and allied sectors. While skill development, tourism infrastructure and financing reforms are widely welcomed, industry leaders agree that GST rationalisation, regulatory clarity and predictable policy frameworks will be critical to sustaining long-term growth.

Union Budget 2026–27: Focus on Tourism, Skills and Destination Development

Presenting the Union Budget 2026–27, Finance Minister Nirmala Sitharaman outlined a Yuva Shakti-driven roadmap anchored on economic growth, capacity building and inclusive development. From a hospitality and tourism perspective, the Budget places emphasis on skilling, infrastructure-led connectivity, destination creation and medical tourism, positioning travel and tourism as contributors to employment generation and regional development.

National Institute of Hospitality and Structured Upskilling of Tourist Guides

A key announcement for the hospitality sector is the proposal to establish a National Institute of Hospitality by upgrading the existing National Council for Hotel Management and Catering Technology. The institute will function as a bridge between academia, industry and government, aimed at strengthening hospitality education, improving training standards and enhancing industry readiness.

In addition, the Budget proposes a pilot scheme to upskill 10,000 tourist guides across 20 tourist sites through a standardized, high-quality 12-week training programme delivered in hybrid mode. The initiative will be implemented in collaboration with an Indian Institute of Management, with a focus on improving visitor experience and professionalising guide services at key destinations.

Tourism Destination Development in Purvodaya and North-East

To support regional tourism growth, the Budget proposes the creation of five tourism destinations across the five Purvodaya States. Additionally, a Scheme for Development of Buddhist Circuits has been announced for Arunachal Pradesh, Sikkim, Assam, Manipur, Mizoram and Tripura. The scheme will cover preservation of temples and monasteries, development of pilgrimage interpretation centres, improved connectivity and enhanced pilgrim amenities.

Medical and Wellness Tourism Push

Strengthening India’s position as a medical tourism hub, the Budget proposes support for States to establish five Regional Medical Hubs in partnership with the private sector. These integrated healthcare complexes will include medical, educational and research facilities, AYUSH centres, Medical Value Tourism Facilitation Centres, and infrastructure for diagnostics, post-care and rehabilitation.

Infrastructure, Connectivity and City Economic Regions

Public capital expenditure has been increased to ₹12.2 lakh crore in FY 2026–27, reinforcing the government’s infrastructure-led growth approach. As part of this push, seven high-speed rail corridors will be developed as growth connectors to promote environmentally sustainable passenger systems, improving inter-city travel and tourism mobility.

The Budget also proposes mapping and development of City Economic Regions (CERs), with an allocation of ₹5,000 crore per region over five years. These regions are expected to leverage agglomeration benefits, supporting urban growth, business travel, conventions and hospitality-led mixed-use developments.

Support for MSMEs, Ease of Doing Business and Logistics Reforms

Recognising MSMEs as a key engine of growth, the Budget proposes a ₹10,000 crore SME Growth Fund to create future champions. This initiative is relevant for small and mid-sized hotels, restaurants, travel companies and tourism startups seeking access to capital and opportunities for scale.

The Budget also outlines multiple trade facilitation measures, including a single interconnected digital window for cargo clearance approvals and a shift to an operator-centric customs warehousing framework with self-declarations, electronic tracking and risk-based audits. These reforms are expected to benefit hospitality supply chains, food and beverage imports and event logistics.

Travel and Passenger Experience Measures

To ease travel-related costs, the Budget reduces TCS on overseas tour programme packages to 2 percent, from the earlier 5 percent and 20 percent slabs. In addition, baggage clearance provisions are proposed to be revised to enhance duty-free allowances in line with present-day travel realities, improving the overall international travel experience.

Sustainability and Green Mobility

High-speed rail corridors and investments in sustainable transport systems underline the Budget’s emphasis on environmentally responsible mobility. Improved connectivity is expected to support tourism dispersal, short-haul travel and the growth of emerging destinations.

Overall Outlook

With a combination of skilling initiatives, destination-focused development, infrastructure expansion and targeted tax reliefs, the Union Budget 2026–27 sets the foundation for experience-led tourism growth. The measures signal long-term intent to strengthen India’s hospitality ecosystem while supporting employment, regional inclusion and improved visitor experiences.