Written by Representatives from India’s hospitality and tourism sector have urged the Government to formally designate the industry with “industry” status, arguing that such recognition would give stakeholders access to more affordable financing. The call came during a pre-budget meeting with Finance Minister Nirmala Sitharaman, as the sector prepares its demands ahead of the upcoming Union Budget.
Key industry bodies participating in the discussion included the Hotel Association of India (HAI), the Association of Domestic Tour Operators of India, Indian Association of Tour Operators, India Food Tourism Organisation, the Tourist Guide Federation of India, Adventure Tour Operators Association, MakeMyTrip, and VFS Global, among others.
Beyond seeking “industry” status, the sector also demanded reforms to simplify the regulatory framework. Their proposals include the creation of a single-window clearance system for licenses, as well as a reduction in the number of approvals and permits required to operate hotels.
They also called for stronger global marketing campaigns to attract tourists and clearer guidance on GST (Goods and Services Tax) rules for hotels. Currently, rooms priced between ₹ 1,000 and ₹ 7,500 attract a 5% GST, while those over ₹ 7,500 are taxed at 18%.
Additional Developments & Context
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The Business Standard reports that the hospitality sector is also pushing for infrastructure status (sometimes used interchangeably with “industry” status), especially for hotel and convention centre projects worth ₹ 10 crore or more.
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Industry leaders have emphasized the need for a digital single-window system to streamline licenses and clearances. This would reduce bureaucratic delays and lower compliance costs.
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There is also a push to further rationalize GST slabs: some in the sector want the 18% bracket eliminated (or merged), making taxation simpler and more competitive.
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According to the Ministry of Tourism, the sector has long sought “industry status” from various state governments, a move that would help drive investment and infrastructure development.
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In its 2025–26 Union Budget, the Government allocated ₹ 2,541 crore to tourism. Major priorities include skill development in hospitality, improving connectivity, facilitating homestays, and boosting destination management.
