India Budget 2026: Major Boost for Travel, TCS Cuts & Tourism Growth

 

TCS cut announcement on overseas tour packages

India Budget 2026 Unveils Big Wins for Travel and Tourism

India’s Union Budget 2026–27 presented by Finance Minister Nirmala Sitharaman has placed strong emphasis on strengthening the travel and tourism industry, making significant policy changes that benefit travellers and bolster sector growth. The new measures include lower taxes on foreign travel, enhanced infrastructure plans, hospitality skilling, and new tourism initiatives to attract both domestic and international visitors.

TCS Reduction: More Affordable International Travel

A major highlight for travellers is the Tax Collected at Source (TCS) cut on overseas tour packages. Under Budget 2026, the TCS rate on international travel and related services has been simplified to a flat 2 %, replacing the previous tiered system of 5 % and 20 % slabs. This change immediately reduces the upfront tax burden for Indian travellers booking foreign holidays and related services, making overseas trips more affordable and easier to plan.

New Tourism Infrastructure and Connectivity Projects

High-Speed Rail Corridors and Waterways

The budget outlines ambitious infrastructure expansions to grow long-distance travel connectivity. Seven high-speed rail corridors will link major cities and act as “growth connectors”, reducing intercity travel time and boosting tourism engagement across regions. Additionally, 20 new national waterways are planned to elevate water transport and support tourism development in coastal and riverine areas.

Medical Tourism and Travel Hubs

To further promote tourism, the government proposed the creation of five regional medical tourism hubs in collaboration with state governments and private partners. These hubs are designed to integrate healthcare with hospitality and attract global medical travellers. 

Hospitality Skilling and Digital Tourism Initiatives

National Institute of Hospitality

To professionalise the travel and tourism workforce, Budget 2026 proposes establishing a National Institute of Hospitality by upgrading the existing National Council for Hotel Management and Catering Technology. This institution will link education, industry, and skill development to raise service standards nationwide.

Tourist Guide Upskilling

A pilot scheme has been announced to upskill 10,000 tourist guides through hybrid training at 20 iconic destinations. Enhanced guide training will enrich visitor experiences and create more employment opportunities.

Digital Tourism Grid

Budget 2026 also includes plans to develop a National Destination Digital Knowledge Grid, a digital repository documenting cultural, heritage, and spiritual sites across India, improving planning and promotion of destinations.

Boost for Heritage, Adventure & Experiential Tourism

The government intends to develop 15 archaeological sites into vibrant cultural attractions with curated walkways, storytelling experiences, and digital interpretation. Budget 2026 emphasises eco-tourism development including mountain trails in Himachal Pradesh, Uttarakhand, and Jammu & Kashmir, and wildlife-linked tourism routes across coastal states.

What These Changes Mean for Travellers

• Lower overseas travel costs: With the TCS cut to 2 %, Indians face reduced upfront costs when planning international trips.

• Better connectivity: High-speed rail and waterways improve access to remote regions and new destinations.

• Enhanced travel skills: Professional training for hospitality and tourist guides boosts service quality.

• Richer experiences: Development of heritage, adventure, and cultural sites invites diverse travel interests.

These initiatives aim to position India as a more attractive travel destination, stimulate job growth, and drive foreign exchange earnings through tourism. Also Read: NDTV India