Union Budget 2026: A Positive Boost for India’s Tourism Sector, Himanshu Patil, President, Outbound Tour Operators Association of India (OTOAI)

The Voice of Chandigarh | Travel Trade Reporter 

The Union Budget 2026 sends an encouraging signal for India’s tourism and travel industry, with a strong focus on infrastructure development, skilling, and destination enhancement. Initiatives such as the National Institute of Hospitality, ecological trek trails, Buddhist circuits, and the upgradation of archaeological sites will strengthen India’s tourism competitiveness and generate meaningful employment. The proposed National Digital Knowledge Grid for Destinations is a forward-looking step that will support smarter planning and promotion.

“The Union Budget 2026 reflects a balanced and progressive approach towards strengthening India’s tourism ecosystem while addressing long-standing concerns of the outbound travel industry.”

We particularly welcome the reduction of Tax Collected at Source (TCS) on outbound tour packages to a flat 2%, replacing the earlier higher slabs of 20% and 5%. This long-awaited reform will ease cash-flow pressures, reduce travel costs, and support the recovery and growth of outbound tourism.

This decision follows sustained representations by OTOAI, in collaboration with EY, sharing industry data and feedback with policymakers on compliance challenges and demand impact. The revised TCS structure will create a level playing field for Indian outbound tour operators while maintaining tax compliance.

OTOAI welcomes this progressive move, and we now await the final fine print of the notification, post which the industry will align its structures and processes accordingly. We remain optimistic about the continued growth momentum of India’s tourism sector.