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Hospitality Sector Seeks Infrastructure Status for Financial Relief

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  Published in Business and Finance on Monday, January 19th 2026 at 7:51 GMT
      Locale: INDIA

The Core Demands: Infrastructure Status and GST Relief

The most significant request revolves around the granting of 'infrastructure status' to the hospitality sector. Currently, hotels, resorts, and related businesses are treated differently from, say, roads or power plants, despite their substantial capital investment, job creation, and contribution to tourism revenue. Achieving infrastructure status is seen as a crucial catalyst for positive change.

Why is this so important? Securing infrastructure status would unlock access to long-term, low-interest financing - a lifeline for many struggling hospitality businesses. Currently, high borrowing costs severely impact profitability and limit expansion plans. Rahul Sharma, Managing Director of Radisson Blu Hotel Group, recently highlighted that this change would "not only ease the financial burden but also attract more investment into the sector." This injection of capital would be transformative, allowing for upgrades, new developments, and a greater capacity to meet growing demand.

Beyond infrastructure status, the hospitality sector is urgently calling for the restoration of GST input tax credit. Recent restrictions on this credit have placed a significant and unwelcome financial strain on businesses, particularly those clustered around popular tourist destinations. These restrictions effectively increase operational costs, impacting pricing and overall competitiveness. Reinstating this credit would provide immediate relief and significantly improve the bottom line for many establishments.

Facilitating International Arrivals: Visa Simplification

The sector's wishlist extends beyond financial considerations to encompass travel facilitation. Easing visa regulations for international tourists is another key priority. A streamlined visa application process, coupled with reduced processing times, would make India a far more attractive and accessible destination for foreign visitors. Lengthy and complex visa processes are a known deterrent to international tourism, and simplifying them would have a direct, positive impact on hotel occupancy rates and overall revenue generation.

The Wider Economic Impact & Future Outlook

The hospitality industry's significance to the Indian economy cannot be overstated. It's a major employer, directly and indirectly supporting countless local businesses - from restaurants and transport services to souvenir vendors and tour operators. The slow, but ongoing, recovery from the pandemic's impact has underscored the fragility of the sector, highlighting the necessity for supportive government policies. While domestic tourism has shown resilience, international arrivals remain crucial for many businesses, and their return is intrinsically linked to a more welcoming and accessible entry process.

Industry estimates suggest that fulfilling these demands - granting infrastructure status, restoring GST input tax credit, and simplifying visa processes - could potentially unlock billions of dollars in new investment and generate a substantial number of new job opportunities across the country. The potential economic ripple effect would extend far beyond the hospitality sector itself.

As Budget 2026 approaches, the eyes of the industry are firmly fixed on New Delhi, hoping that their pleas will be heard and that the policies implemented will pave the way for a brighter, more sustainable future for India's hospitality landscape. The next few weeks will be crucial in determining the trajectory of this vital sector and its contribution to the nation's overall economic growth.