The Union Budget 2025-26, presented by Finance Minister Nirmala Sitharaman, has once again sidelined India’s inbound tourism sector and the Incredible India campaign. While the total budget allocation for the Ministry of Tourism remains nearly unchanged at INR 2,541 crore (compared to INR 2,484 crore in 2024-25), the allocation for overseas promotion and publicity, including Market Development Assistance (MDA), has dropped drastically to INR 3.07 crore.

This sharp cut follows the previous budget, which had set aside INR 33 crore for the same category, an amount that was retained in the revised estimates as well. Industry stakeholders have expressed disappointment, stating that the government’s approach is pushing the inbound tourism sector towards self-reliance rather than providing necessary support.

Instead, the government has prioritized domestic tourism promotion, allocating nearly INR 137 crore out of the total INR 140 crore earmarked for branding and promotions. This shift underscores the administration’s focus on promoting domestic travel over attracting international visitors.

Aviation Sector Sees Budget Cuts

The aviation industry has also witnessed a significant cut in allocations for 2024-25. A major chunk—INR 1,158.79 crore—has been assigned to AI Asset Holdings Ltd. to service loans transferred to the special purpose vehicle (SPV) as part of Air India’s financial restructuring. This marks a decrease from INR 1,144.49 crore in 2023-24, with the revised estimate standing at INR 713.92 crore.

Industry Reactions

Reacting to the budget, a prominent tour operator stated, “The government is indirectly asking the inbound tourism industry to be ‘Atma Nirbhar.’ While the budget supports hotels, homestays, and domestic tourism, there’s absolutely nothing for inbound tourism, which is a major foreign exchange earner for the country.”

Another industry expert pointed out that while Tax Collected at Source (TCS) relaxations will boost outbound travel, there are no concrete measures to support inbound tourism. “People with a PAN card can now claim tax reimbursement, making outbound travel more attractive, but there’s no stimulus for foreign tourists coming to India,” he added.

Moreover, the gap between budget estimates and revised allocations for tourism continues to widen. The initial budget estimate for 2024-25 was INR 2,485 crore, but the revised estimate dropped sharply to INR 855 crore—just 34% of the planned allocation.

Conclusion

While the government has introduced measures to ease e-visa processes and implement visa fee waivers for select countries, the severe cut in overseas marketing funds raises concerns about India's ability to attract global tourists. As the tourism industry recovers post-pandemic, stakeholders believe that sustained international branding and promotions are crucial to maintaining India’s competitive edge in global tourism.