The Federation of Hotel & Restaurant Associations of India (FHRAI), the world’s third-largest hospitality association, has urged the government to introduce key reforms in the upcoming Union Budget 2025-26 to boost the tourism and hospitality sector. Highlighting the industry’s role in economic growth, employment generation, and foreign exchange earnings, FHRAI has called for measures to address critical challenges and enhance competitiveness.
A primary demand is to grant infrastructure status to hotel and convention center projects costing ₹10 crore and above, significantly lowering the current thresholds of ₹200 crore and ₹300 crore, respectively. FHRAI also seeks the removal of the one-million-population requirement for cities, which excludes most tourism-rich destinations from accessing infrastructure benefits.
FHRAI President K. Syama Raju emphasized the need for rationalizing GST rates, which are among the highest globally, and delinking GST on restaurants from hotel room tariffs. Additional recommendations include simplifying licensing processes, restructuring GST for banquets and events, and revising “place of supply” rules to allow businesses to claim input tax credits for services sourced from other states.
These reforms, FHRAI asserts, would drive investment, reduce operational costs, and position India as a more competitive and sustainable global tourism leader.
