The first Union Budget of the Modi 3.0 Government is finally out, bringing promising developments for the tourism industry. The Indian government has announced a major plan to collaborate with state governments to enhance 50 tourist destinations nationwide. Finance Minister Nirmala Sitharaman introduced various initiatives in the Union Budget 2025 to boost tourism, create jobs, and stimulate economic growth through strategic investments.
The budget underscores the growing recognition of tourism as a vital economic sector. It also highlights the need for sustained support and financial assistance for businesses in the industry. Sitharaman stated that states will allocate land for key infrastructure projects, and hotels in these areas will be included in the infrastructure harmonized master list (HML).
Key Budget Highlights for the Tourism Industry

Destination Promotion
The government will collaborate with states to develop the top 50 tourist destinations through a competitive challenge. States must allocate land for essential infrastructure, and hotels in these locations will be integrated into a unified infrastructure list.
Destination Partnerships
In coordination with state authorities, 22 tourist destinations will undergo enhancements to improve their appeal and accessibility, contributing to a broader effort to strengthen tourism infrastructure.
Skill Development Program
The Union Budget 2025 outlines government-led training programs to help young individuals develop industry-specific skills, particularly at Institutes of Hospitality Management. Additionally, MUDRA loans will be provided for homestays, travel access to tourist spots will be improved, and states will receive incentives for effective tourism management, including better amenities, cleanliness, and marketing strategies.
Expanding Air Connectivity Through UDAN
To improve access to remote areas, the government will continue the Regional Connectivity Scheme (RCS) under the UDAN initiative. The updated plan aims to establish air links to 120 new destinations over the next decade, benefiting an additional 4 crore passengers and driving aviation sector growth. So far, UDAN has facilitated 619 routes across 88 airports, serving 1.4 crore travelers. The expansion will make travel to smaller towns and emerging tourist destinations more convenient and affordable.
MUDRA Loans for Homestays
MUDRA loans will now be available for homestay businesses, providing small-scale tourism operators with financial support to enhance accommodations. This initiative aims to improve guest experiences while fostering entrepreneurship and job creation in both rural and urban areas.
E-Visa Simplification
To attract more international tourists, the government is streamlining e-visa processes, making travel to India more accessible. The Union Budget 2025 prioritizes improved travel convenience and transportation links, ensuring that destinations across India—from mountains to beaches—are easily reachable for both domestic and foreign visitors.
Spiritual Tourism
The Finance Minister reaffirmed the government’s focus on developing spiritual and religious tourism, particularly sites associated with Lord Buddha. Additional measures for Buddhist tourism will be introduced in the upcoming July Budget. The government has been actively promoting Buddhist heritage sites in recent years.
Medical Tourism
The government plans to boost medical tourism through partnerships with the private sector under the “Heal in India” initiative while simplifying visa procedures for international patients.
PM Gatishakti for Private Sector Access
A major budget announcement was the introduction of the PM Gatishakti initiative, allowing private sector access to critical data and mapping resources. This initiative aims to enhance connectivity, logistics, and seamless transportation for tourists, making travel to various destinations more efficient.
Finance Minister Nirmala Sitharaman emphasized that the UDAN scheme will improve regional connectivity by adding 120 new destinations and serving 4 crore additional passengers over the next decade. This expansion will make travel easier, boost tourism to both established and emerging destinations, and create economic opportunities for local communities.
Union Minister for Tourism and Culture, Gajendra Singh Shekhawat, voiced his support for the government’s plan to enhance the top 50 tourist destinations in collaboration with states. He highlighted that states must allocate land for infrastructure projects, with hotels in these areas included in a coordinated infrastructure list.
Role of the Tourism Industry in India’s Economy

India’s tourism sector is currently valued at $256 billion, reflecting a 10% growth over the past year. According to the World Travel & Tourism Council, the industry employs 45 million people, with domestic tourism contributing the largest share, having grown by 15% since 2019.
Government estimates for 2024 show that tourism contributes 5% to India’s GDP. The 2024 National Account Statistics indicate a direct contribution of 2.6% and an indirect contribution of 2.4% to GDP from the tourism sector. In the first half of 2024, 46% of foreign tourists visited India for leisure and recreation. The Indian diaspora accounted for over a quarter of Foreign Tourist Arrivals (FTAs) between January and June.
India currently ranks 39th in the World Economic Forum’s Travel and Tourism Development Index, which evaluates various factors influencing tourism growth. According to the UNWTO Barometer, India holds the 24th position in terms of foreign tourist arrivals.
Industry Expert Opinion
“The tourism industry is the backbone of our country. It is encouraging to see the budget acknowledge key areas such as visa facilities, destination development, and infrastructure improvements. With proper planning and sustainable development, India can showcase its hospitality culture on both global and domestic fronts. The new Union Budget 2025 brings hope for the tourism industry and a promising outlook for the financial year ahead.” — Rohan Verma, CEO, JustWravel.
The Union Budget 2025 outlines a clear vision for strengthening India’s tourism industry, simplifying travel processes, and leveraging the country’s potential in medical tourism. Through initiatives like visa reforms, infrastructure development, funding for homestays, and private-sector collaborations, the government aims to position India as a top global destination for both travel and healthcare.