Updated 18:13 IST, January 26th 2025
Hospitality Sector Seeks Infrastructure Status and Tax Reforms in Budget 2025
Key demands include infrastructure status, tax streamlining, simplified visas, and state incentives to attract investment.

Ahead of the 2025 Budget, the hospitality sector in India has called for several reforms to help unlock its full potential. Key demands include granting the sector infrastructure status, streamlining tax structures, simplifying visa processes, and encouraging state governments to offer more incentives to attract investment.
K B Kachru, President of the Hotel Association of India, highlighted these issues in an interview with PTI, stressing the importance of targeted support for the industry.
Kachru stressed the need for India to rebrand and market itself more effectively, citing examples from countries like Japan, South Korea, and Thailand, which have boosted their economies by prioritising tourism. He also pointed out the untapped potential of Meetings, Incentives, Conferences, and Exhibitions (MICE) tourism, urging India to identify and develop MICE destinations that can draw international visitors and investment.
Fixing tax challenges for investment
The hospitality industry leader argued that the private sector’s involvement in driving investment is critical, but to encourage private capital, the sector needs to offer reasonable returns on investment. He also said that taxation remains a major challenge, with the current system having a range of tax rates. To address this, Kachru suggested India adopt a more uniform tax policy, taking cues from countries like Singapore, Sri Lanka, and Thailand.
Further, Kachru proposed that state governments need to be more proactive in facilitating investments by offering incentives and making it easier to set up and operate hotels. While acknowledging that the number of licenses required to establish a hotel has reduced over time, he stressed that the process could still be further streamlined. He specifically called for the implementation of a single-window approval system to cut down on bureaucratic delays.
Simplify visas, boost GDP
Kachru also pointed to the importance of simplifying the visa process, which could boost the country’s tourism numbers. He compared India’s tourism contribution to GDP—around 6%—with Thailand, where tourism accounts for 25% of the GDP. He argued that by granting infrastructure status to the hospitality sector, loans for hotel and related developments could be made more accessible at competitive interest rates.
Moreover, Kachru suggested that the 50 new tourist destinations being developed by the government should be integrated with infrastructure projects for hotels, convention centers, and entertainment facilities. He proposed that investments of up to Rs 10 crore for such projects should be classified within the industry to ensure they receive the necessary support.
Finally, Kachru called on state governments to align their policies, such as electricity tariffs, with those provided to other industries to support the growth of the hospitality sector.
(With PTI Inputs)
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Published 18:13 IST, January 26th 2025