The Union Budget 2026–27, presented on February 1, has repositioned tourism as a strategic pillar for economic growth and employment. The focus shifted heavily toward niche experience-based tourism (eco-trails, heritage and medical) rather than just general infrastructure. We decode the benefits the tourists and the tourism industry can avail after the new budget.
One of the most immediate pocket-ready benefits is the rationalisation of Tax Collected at Source (TCS) on overseas tour packages has been slashed to a flat 2 percent. Previously, rates could go as high as 20 percent for certain packages. This reduction significantly lowers the upfront cost for outbound travellers and improves liquidity for tour operators.
The budget introduced specific Thematic Tourism Trails to promote adventure and nature-based travel. Mountain Trails such as sustainable hiking and trekking routes in Himachal Pradesh, Uttarakhand and Jammu & Kashmir. Turtle Trails nesting site routes in Odisha, Karnataka and Kerala. Specialised bird-watching trails around Pulicat Lake (Andhra Pradesh/Tamil Nadu). Development of Araku Valley (Eastern Ghats) and Pothigai Malai (Western Ghats) for eco-trails.
What to expect?
Sites like Lothal, Dholavira, Sarnath and Leh Palace will be transformed into experiential destinations. This includes new curated walkways, conservation labs, and immersive storytelling technology. A dedicated scheme to develop spiritual tourism in the Northeast, covering Arunachal Pradesh, Sikkim, Assam, Manipur, Mizoram and Tripura.
The government will upgrade the existing National Council for Hotel Management into a premier National Institute to bridge the gap between academia and industry. The government will upgrade the existing National Council for Hotel Management into a premier National Institute to bridge the gap between academia and industry. A pilot project in collaboration with IIMs aims to provide world-class training to 10,000 tour guides across 20 iconic destinations.
Major differences
While the strategic focus increased, the actual Ministry of Tourism budget saw a marginal dip to ₹2,438 crore (down from ₹2,541 crore last year), though this is offset by larger integrated infrastructure spends in Railways and the Purvodaya (Eastern India) regional development plans.
The budget promised support for states to establish five regional medical tourism hubs (in partnership with the private sector) to position India as a global healthcare destination. A new Viability Gap Funding (VGF) scheme was introduced to subsidize seaplane operations, targeting last-mile connectivity for remote water-linked destinations. Seven new corridors (including Mumbai-Pune and Delhi-Varanasi) were announced to improve inter-city tourism mobility.
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