The government’s decision to reduce the tax collected at source (TCS) for foreign tour packages is likely to interfere with Prime Minister Narendra Modi’s efforts to encourage couples to opt for destination weddings in India.
Presenting the Union budget for 2026-27 in the Lok Sabha, finance minister Nirmala Sitharaman said: “I propose to reduce TCS rate on the sale of overseas tour programme package from the current 5 per cent and 20 per cent (under a slab-based system) to 2 per cent without any stipulation of amount.”
Modi had in Mann ki Baat on November 26, 2023, flagged the trend of foreign destination weddings.
“...If we celebrate marriages on Indian soil, amid the people of India, the country’s money will remain in the country. The people of the country will get the opportunity to render some service at your wedding… even poor people will tell their children about that occasion...”
In the tourism budget, the allocation for “domestic promotion and publicity, including market development assistance” has been brought down to zero from ₹136.9 crore. The budget for “capacity building for service providers” has been doubled from ₹25 crore to ₹50 crore, ostensibly “for upskilling 10,000 guides in 20 iconic tourist sites through a standardised, high-quality 12-week training course in hybrid mode, in collaboration with an Indian Institute of Management”.
Other proposals to boost domestic tourism include a seaplane scheme and a National Destination Digital Knowledge Grid to digitally document all places of significance across the country, including cultural and spiritual locales. The government also proposes to develop mountain trails in Himachal Pradesh, Uttarakhand and Jammu and Kashmir; Araku Valley on the Eastern Ghats and Podhigai Malai on the Western Ghats.
Sitharaman said key turtle nesting sites and turtle trails would be developed in the coastal areas of Odisha, Karnataka and Kerala, besides bird watching trails along the Pulicat Lake in Andhra Pradesh and Tamil Nadu.
Sanjay Razdan, vice-president of the Indian Association of Tour Operators, welcomed the reduction in TCS. “This will increase capital inflow to tour operators who offer foreign tour packages and promote outbound tourism,” he told The Telegraph.
