FHRAI Seeks Reforms in Budget 2025-26 to Boost Hospitality and Tourism

The Federation of Hotel & Restaurant Associations of India (FHRAI), the world’s third-largest hospitality association, has presented key recommendations for the Union Budget 2025-26, urging reforms to address challenges in the hospitality and tourism sector. FHRAI believes these reforms can drive investment, create jobs, and boost economic growth in this vital industry.

FHRAI’s primary proposal is to grant infrastructure status to hotel and convention center projects costing ₹10 crore or more, significantly lowering the current threshold of ₹200 crore for hotels and ₹300 crore for convention centers. The association also calls for removing the criterion requiring cities to have a population of over one million, which currently excludes most Indian towns with significant tourism potential.

Simplifying licensing processes through a single-window clearance system is another crucial demand. FHRAI highlights that complex regulations deter investment and stifle growth in the sector.

Additionally, the association advocates for rationalizing GST rates on hospitality services, delinking restaurant GST from room tariffs, and revisiting GST “place of supply” rules to allow businesses to claim input tax credits across states. These measures would reduce costs and improve India’s global competitiveness in tourism.

FHRAI also seeks reforms in excise and liquor licensing rules, proposing a simplified process with nominal fees akin to the FSSAI registration system, enabling businesses to meet growing demand efficiently.

K Syama Raju, President of FHRAI, stated, “The hospitality sector is vital to India’s economic growth, employment generation, and foreign exchange earnings. These reforms will unlock the sector’s full potential, positioning India as a global tourism leader.”

FHRAI believes these changes are critical for achieving India’s goal of becoming a $1 trillion tourism economy by 2047.

Share your love