As India prepares for the Union Budget 2025, the hospitality and F&B sectors are eager to receive targeted reforms that can foster growth and sustainability. Industry leaders have outlined key expectations that will drive innovation, streamline operations, and support the expansion of these sectors, let’s dive in!
Tejus Jose, Director of Operations at ibis & ibis Styles India
The direct contribution of the Indian hotel industry to the country’s GDP is estimated to touch $1 trillion by 2047, driven by a significant jump in domestic tourist visits and international arrivals. As we approach the Union Budget 2025-26, the hospitality sector is optimistic about receiving continued support to fuel its growth trajectory.
From an operational standpoint, we anticipate policies that ease taxation and incentivize sustainable practices, enabling hotels to adopt energy-efficient technologies without financial constraints. Additionally, we propose a dual GST policy of a 5 per cent GST rate and a 12 per cent GST rate with input tax credit. This approach would enable us to offset current expenses, increase capital expenditure, open more restaurants, and ultimately generate more employment and revenue for the Government.
On the hiring front, initiatives to enhance skill development through targeted programs for the hospitality sector can help bridge the talent gap and create a robust workforce. Additionally, tier 2 and 3 cities have emerged as budding heroes of the hospitality industry, with immense potential to drive the next phase of growth. We hope the government introduces incentives for investment in these regions, focusing on improved infrastructure, tax benefits for new projects, and enhanced tourism promotion initiatives.
Overall, we look forward to measures that bolster tourism infrastructure, such as improved connectivity and investment in underexplored destinations, which will benefit the entire industry. A strategic focus on public-private partnerships, along with tailored support for smaller cities, can pave the way for sustained innovation and growth in the sector.
Shamsher Dewan, Senior Vice President and Group Head, Corporate Ratings, ICRA Limited
Post Covid, the Indian hospitality industry recovered, and the demand rebounded sharply in recent years. Factors like increasing domestic tourism, business travel, growing demand from MICE and weddings and enhanced connectivity to tier-2/3 cities supported the growth for hoteliers.
ICRA expects the Union Budget 2025-26 to focus on measures supporting tourism and infrastructure investments, ease of doing business, enhanced connectivity and accessibility, and rationalization of tax rates. With the pace of supply growth continuing to lag demand, policy frameworks aiding favourable financing terms shall support inventory addition to meet the rising demand.
Manbeer Choudhary, CMD, Noormahal Group
The hospitality sector in India plays a crucial role in job creation and is one of the largest contributors to the country’s economy. The Union Budget 2025 could be pivotal in enhancing the industry and significantly contributing to the vision of a $3 trillion tourism GDP by 2047. One of the key expectations from the government is the abolition of the 18% GST category for hotels with room rates exceeding Rs 7,500, merging it with the 12% GST category to stimulate domestic and inbound tourism.
Moreover, one of the longing demands is granting industry status to the hospitality sector, as this recognition could lead to improved access to finance, regularized policies, and a more strategic approach to tourism development. The special allocation for infrastructure development especially in tier II and tier III cities can boost tourism in the regional areas while also generating employment opportunities for the youth in their native place.
Charging zero GST or receiving a GST refund for foreign guests—would foster increased inbound tourism and enhance global competitiveness. Furthermore, incentives encouraging eco-friendly practices and dedicated investment in green tourism infrastructure can pave the way for a sustainable future.
By aligning with the United Nations Sustainable Development Goals, the policies for green tourism can effectively serve the conscious travelers in the era focussed on sustainability. Additionally, initiatives focusing on digital innovation and trends can transform the hospitality sector by integrating the latest technologies and AI, enhancing travelers’ experiences.
Simranjeet Singh, Director, CYK Hospitalities
“The upcoming Union Budget 2025 is quite expected to have reforms for innovation. For start-ups and food and beverage (F&B) sectors, there is also great hope for simplified taxation, namely GST rate cuts on small eateries and essentials-those will ease financial stress. A very strong push has been made towards subsidies on packaging that preserve the environment so that food becomes scarce, aligning it to the perceptions of global sustainability.
Increased budgetary support to food processing facilities might as well drive off multiple rural jobs and boost exports. Start-ups are also demanding continued tax exemptions and the removal of angel taxes so as to attract more funding. Investments into Tier 2 and Tier 3 cities will benefit from policy environments that promote digital ecosystems to stimulate innovation, especially in agri-tech, health-tech and green-tech.”
Nidhi Singh, Co-Founder, Samosa Singh
“Being a F&B brand dedicated to prioritizing quality and innovation, we look forward to the Union Budget 2025 reforms that may vicariously fuel the growth of startups pertaining to the former. Swiftly approved policies that would potentially simplify taxation, and promote sustainable business practices can act as promoters for escalating startups like ours.
F&B sector being in the focus, stimuli for local sourcing, reduced taxes on essential supplies, facilitated support for cold-chain infrastructure, can result in significantly impacting operational efficiency and product quality in the constructive manner. We hope that implementation of this budget would make provisions for a far more resilient and thriving startup ecosystem, and be the breath of prerequisite fresh air.”
Vikesh Shah, Founder, 99 Pancakes
“At 99 Pancakes, we are committed to redefining the QSR dining experience & we are hopeful about the Union Budget 2025 to address key grown enablers for our F&B Industry. This sector has been brawling with inflating operational & input costs. With a reduction in GST on dining services along with a tax alleviation on sustainability packaging could be of crucial assistance.
Scalability & Market Expansion could be the necessary impact driven from adopting advanced kitchen technologies leading to operational efficiency. Such robust measures accredit brands like ours to continue striving towards innovation, amplifying customer experience & contributing to our country’s economic momentum.”
Rajat Agrawal, CEO, Barista Coffee
The restaurant industry has long been waiting at the doors without much being granted to the kitty.
Expect the following as part of this budget:
- Relaxed lending policies for retailers, providing credit availability based on scale and without collateral.
- A single-window policy for faster restaurant openings, uniform licensing across states, and seamless renewals.
- Availability of input tax credit on operating expenses (Opex) and capital spending will assist in passing on GST benefits to customers, while reducing operational expenses will encourage the opening of new restaurants, thereby creating more jobs and revenue.
- Easy permissions and licensing for 24*7 operating formats.
- Incentives based on business scale and workforce deployed.
Sandeep Jain, Founder & MD, Desi Masala
Over the past few years, the restaurant industry has not only contributed substantially to economic growth but has also been a steadfast source of employment generation. As we move closer to the Union Budget 2025, the restaurant sector has high expectations from the government. One critical aspect that needs urgent attention has been reinstating input tax credit (ITC) for the industry. The budget needs to revisit the input tax credit on GST for the sector as this would help reduce operational costs and improve profitability.
Other key areas include tax incentives, easier credit access, rationalising licenses and regulations, and other policy support to promote business growth. Another prominent demand of the restaurant sector is granting industry status as this will enable them to get financial benefits such as loans at lower interest rates, special schemes, subsidies, fast track clearance processes for licenses etc. An industry status to the food service sector will also encourage entrepreneurship. Overall, these measures will definitely boost sustained growth of the restaurant industry, which contributes significantly to economic activity.
Gautam Munjal, founder and CEO of Minimalist Hotels
As we approach the upcoming budget announcement, the travel and hospitality sector holds high hopes for transformative measures that will enhance its growth and resilience. With tourism being a significant contributor to the Indian economy, it is essential to allocate a substantial budget towards travel and tourism development. This includes building better infrastructure such as modern airports, improved roads, and efficient public transport systems to ensure seamless travel experiences for both domestic and international tourists.
Sustainability must remain at the forefront of these initiatives. Introducing incentives for eco-friendly hospitality practices, supporting renewable energy adoption, and establishing guidelines for sustainable tourism can pave the way for long-term growth while protecting India’s natural and cultural treasures.
Moreover, educating travelers about responsible tourism and environmental conservation should be a priority. Campaigns promoting eco-conscious behavior and training programs for industry professionals can help create an environmentally aware travel ecosystem.
Rajat Sethi, Cluster General Manager, Raffles and Fairmont Jaipur
We are optimistic about the upcoming Union Budget 2025 and look forward to measures that can further boost the hospitality sector. Support for sustainable hospitality, tax benefits for the luxury segment, and enhanced infrastructure development will be key to driving growth. Additionally, initiatives to promote skill development and employment in the hospitality industry will strengthen the sector and contribute to the economy. We hope the budget prioritizes these areas to position India as a leading global travel destination
Mateen Khan – Co Founder, Monday Hotels
The upcoming budget presents a significant opportunity for India’s hospitality sector, a cornerstone of the nation’s economy. Given the pivotal role the service sector plays in driving GDP, it is imperative that sustainability takes center stage in the 2025 budget. By championing innovative and sustainable practices, India has the potential to further solidify its position as a global leader in hospitality. At *Monday Hotels* , we view this as a prime moment to propel sustainable growth, advocating for policies that will benefit the entire sector.
To stimulate growth, key strategies include reducing GST rates to make hotel stays and dining more affordable, and revising tax policies to attract a broader spectrum of guests. The government should also prioritize the development of hotels in experiential destinations and hidden gems across India, particularly in underserved regions. Offering incentives for green infrastructure and technology—such as solar energy, water recycling systems, waste management, and IoT smart meters—will drive sustainability while reducing operational costs.
Additionally, simplifying regulatory processes and fostering training programs in collaboration with hospitality institutions will address the post-COVID skills gap and enhance workforce capabilities. These policies will catalyze long-term growth, elevate India’s global hospitality standing, and create a more sustainable, competitive industry.
At Monday Hotels , with our tagline _”We Value You!”_ , we are committed to leveraging these opportunities to drive both innovation and sustainability in the hospitality sector, benefitting both our country and the planet.
Sanat Hooja, Partner, Machan Resorts LLP
As the upcoming budget approaches, we at Machan Resorts LLP anticipate an increase in investments focused on enhancing infrastructure that improves connectivity and accessibility, especially in emerging travel destinations.
Furthermore, we stress the critical need for sustainable tourism initiatives that promote environmentally responsible practices while aligning economic growth with ecological stewardship.
The government could consider leasing heritage properties, such as havelis, castles, forts, and palaces, through Public-Private Partnerships. This initiative would not only boost the tourism sector but also provide visitors with an immersive experience of the rich cultural heritage represented by these historic monuments.
John Royerr, Founder of Ochre Spirits around the Alco-BEV Industry
The alco-bev industry plays a significant role in contributing to state revenues, with taxes from this sector forming a major part of the exchequer. Despite this, the industry faces regulatory inconsistencies and a lack of streamlined policies that hinder its potential for growth and innovation. For the sector to thrive and enhance its contributions, the government must take a more active role in fostering a supportive ecosystem. Effective Free Trade Agreements (FTAs) with global markets can boost international trade, while standardized pricing and unified policies across states would ensure a fair, transparent, and efficient marketplace.
By prioritizing a stable regulatory framework and incentivizing innovation, the government can not only strengthen one of its most significant revenue-generating industries but also position India as a global leader in the alco-bev space. It’s time for policy reforms that reflect the sector’s vital economic role and its potential to drive sustainable growth.
Dinesh Yadav, Founder and MD of Fine Acers
As we look ahead to Budget 2025, the real estate and hospitality sectors are hopeful for policy reforms that could significantly shape future investment landscapes. A key trend in hospitality is the shift from traditional large-scale hotels to niche experiences, with growing demand for experiential tourism, wellness retreats, and boutique properties offering sustainable and unique stays.
Streamlining licensing and compliance processes would be instrumental in attracting substantial investments. Currently, the sector is encumbered by complex licensing requirements, multiple approvals, and high taxes, making hospitality investments less appealing—particularly for capital-intensive projects with long gestation periods. A move towards single-window clearances would simplify business operations, reduce costs, and minimize delays.
The Indian hospitality sector is projected to grow at a compound annual growth rate (CAGR) of 10.3% between 2023 and 2028, driven by factors such as increasing domestic travel, government initiatives like Dekho Apna Desh, and rising disposable incomes. Investments in hospitality, especially in Tier 2 and Tier 3 cities, have the potential to boost local economies through job creation, support for ancillary industries, and infrastructure development.
Huzefa Rangwala and Jasem Pirani, Design Directors and Co-founders, MuseLAB
As the travel and hospitality industry continues to evolve, there is a growing demand for unique, boutique, and curated experiences that showcase India’s diverse cultural heritage. To capitalize on this the industry expects the Union Budget to provide incentives and support for the development of such experiences. Subsidies and grants for entrepreneurs will enable investments in development of underserved areas. These policies will encourage leaders in the industry to create more experiential and unique services and products – promoting growth for all.
Nayan Shah, Founder of Palindrome Spaces
I believe the Union Budget 2025 should focus on investment in high-quality infrastructure, including good architecture and urban development. Enhancing connectivity, creating well-designed facilities, and promoting sustainable practices can drive growth in the hospitality and F&B sectors, elevating India’s global standing.
Pranav Rungta Co-founder and Director of Nksha restaurant
The restaurant sector in India plays a vital role in the country’s economy, but it is currently facing several challenges. One of the primary concerns is the restoration of the GST Input Tax Credit, which would provide much-needed relief to the sector by reducing operational costs. In addition, the government should consider excluding the recent notification regarding GST on commercial leases through Reverse Charge Mechanism, which has added financial pressure to many smaller businesses. Another key recommendation is the reintroduction of the Service Export from India Scheme (SEIS) and a reduction in GST on eco-friendly materials, which would encourage the use of sustainable packaging solutions.
Furthermore, granting the food services industry official “industry” status and creating a dedicated ministry or department for food services would ensure more focused policy support, targeted welfare programs for employees, and the development of equitable e-commerce policies that foster growth. Simplifying licensing requirements and extending operating hours would also help contribute to the sector’s long-term viability, ensuring its continued success and growth.
Pushpendra Bansal, COO, Lords Hotels & Resorts
Lords Hotels & Resorts strongly believes that tourism and hospitality, contributing nearly 10% of India’s GDP, should be recognized as a priority sector.
The government should issue a Gazette notification to grant industry status to the hospitality sector, ensuring that all states uniformly implement this policy. This recognition would enhance infrastructure, providing multiple benefits: it would incentivize developers, reduce the financial strain on new projects, and significantly strengthen the industry. Such measures are vital for boosting GDP, generating employment, and increasing foreign exchange earnings.
Currently, the diverse services offered by hotels and restaurants are subject to varying GST rates. A uniform GST rate of 12% across all service categories would simplify taxation, enhance transparency, and create a more favorable environment for the hospitality sector.
Suhail Kannampilly, Managing Director, The Fern Hotels & Resorts
With the upcoming Budget, the tourism sector anticipates crucial measures, including the granting of industry status, the formulation of a national tourism policy, and a unified GST rate. Emphasis on sustainable practices, along with incentives for eco-friendly investments, will further boost growth. Additionally, targeted funding for skill development and aggressive promotion of India as a premier global destination will significantly enhance job creation and drive long-term economic growth, reinforcing tourism’s pivotal role in the nation’s economic landscape.
Nikhil Sharma, Managing Director and Area Senior Vice President, South Asia, Radisson Hotel Group
India remains a high growth potential market for hotel chains, with an expected revenue CAGR of 6-8% over the next 5 years. The industry is in a strong position right now, with the domestic travel upsurge being driven by structural factors like increase in disposal income, growing pie of the middle class and Government initiatives like ‘Dekho Apna Desh’. Tier-II and III markets are also emerging as lucrative options with preference for branded hotels
Rajat Sethi, Cluster General Manager, Raffles and Fairmont Jaipur
We are optimistic about the upcoming Union Budget 2025 and look forward to measures that can further boost the hospitality sector. Support for sustainable hospitality, tax benefits for the luxury segment, and enhanced infrastructure development will be key to driving growth. Additionally, initiatives to promote skill development and employment in the hospitality industry will strengthen the sector and contribute to the economy. We hope the budget prioritizes these areas to position India as a leading global travel destination.
Basab B Paul, Managing Director and CEO of Octaga Green
An ideal framework for AlcoBEV across all regions of India would involve the implementation of a standardized policy by the government, wherein a uniform excise or VAT, or an additional excise duty, is levied across all states. Such a policy would significantly simplify operations for manufacturers, creating a level playing field across the country. Currently, the excise duties vary considerably between states, with regions like West Bengal, Telangana, and Kerala having different excise duties compared to states such as Jammu & Kashmir, Chandigarh, and Maharashtra. Streamlining these policies in a manner similar to GST would greatly enhance efficiency and ease of doing business.
This harmonization would eliminate the need for multiple cost structures, complex incentive programs, and the calculation of different MRPs for various brands in each state. Moreover, it would address the disparity in pricing, why should one Indian have to pay more for his bottle of alcohol or alcoholic beverages in one state versus the other if this whole thing could be looked into and made it to one India one policy would be a welcome change. A unified, pan-India policy would undoubtedly be a progressive change, promoting fairness and consistency in the market.
Kush Kapoor, CEO, Roseate Hotels & Resorts
The Budget 2025 includes initiatives that are poised to indirectly benefit the hospitality sector and enhance the overall guest experience. One of the standout measures is the provision of stipend for interns under government funding, which will play a crucial role in attracting fresh talent and strengthening our workforce. We anticipate that it will significantly improve our recruitment efforts and foster a skilled and dynamic team.
Additionally, the government’s commitment to supporting farmers is a welcomed step that will improve the quality and availability of fresh, sustainable produce. This is critical for maintaining high standards in the hospitality supply chain, from hygiene to food and beverage offerings. With an increasing focus on personalized guest experiences, we believe this focus on natural farming aligns with the growing demand for organic, locally-sourced ingredients, allowing us to craft exceptional, bespoke culinary experiences for our guests.
In terms of taxation policy, we are optimistic about a leaner structure and look forward to more details that will help streamline operations and improve profitability. The provision of a set salary for first-time employees is another intriguing aspect, though it remains unclear whether this applies to the hospitality industry, though this would certainly enhance our recruitment efforts.
As we move into 2025, the hospitality sector’s ability to provide bespoke, high-quality experiences is central to our growth. The Budget’s focus on supporting sustainable practices, workforce development, and potential tax incentives will undoubtedly play a significant role in helping us elevate the guest experience at Roseate Hotels and Resorts.
Vaishakh Surendran, General Manager of Lyfe Hotels Bhubaneswar
Expectations from Union Budget 2025 include easing business operations by establishing a central regulatory authority to oversee all licenses and compliances required for starting and running a hospitality business. This can be achieved when the hospitality industry gets the status of an industry across India and not just in a few states. This will further help in creating more job opportunities. Currently, the sector faces varied regulations that differ significantly between regions, adding complexity to operations.
Extending the ‘Make in India’ program to the service sector is crucial for empowering the growth and development of homegrown hotels and resorts. By offering SOPs and incentives for promoters, these initiatives encourage investment and ensure that generated funds remain within the country, unlike international brands that channel profits to head offices abroad. This harmonization would support fair competition and enhance the growth of Indian hospitality in general
We can secure India’s position as a leading destination for medical tourism by promoting medical tourism, especially in regions like Bhubaneswar that has world-class hospitals and medical colleges. Increasing the budgetary allocation for health to 2.5% as requested by medical bodies will indirectly boost demand for rooms, particularly from clients in the Middle East and Bangladesh. By making these changes, India has tremendous potential to be the leading destination for hospitality.
