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Foreign tourist arrivals in India jump 7x in 3 years; GST cuts to accelerate growth
India has cut GST on hotels, transport, and cultural goods to make travel cheaper and attract more foreign visitors. The move builds on a surge in FTAs from 15.27 lakh in 2021 to 99.52 lakh in 2024.
Hotel stays below ₹7,500 per night will now attract just 5% GST, down from 12%, directly reducing travel expenses for budget-conscious international visitors.
India is sharpening its appeal as a global tourism hotspot with sweeping GST reductions that lower costs for hotels, transport and cultural goods, a move expected to accelerate the country’s robust post-pandemic recovery in foreign tourist arrivals (FTAs).
Between 2021 and 2024, India’s FTAs surged from 15.27 lakh to 99.52 lakh, a nearly sevenfold rise that signals strong international demand for Indian travel experiences. The government’s new tax rationalization measures, officials say, will make the country even more competitive against other global tourism destinations.
Hotel stays below Rs 7,500 per night will now attract just 5% GST, down from 12%, directly reducing travel expenses for budget-conscious international visitors. The move is expected to boost inbound flows for weekend city trips, pilgrimage routes, and heritage circuits, while also encouraging private investment in mid-segment hotels and homestays.
Transport has also become cheaper. GST on buses with seating for 10 or more has been cut from 28% to 18%, which could translate into lower fares on tourist coaches, state-run transport, and private operators catering to foreign tour groups. The government hopes this will shift more travellers toward public and shared transport, easing congestion while improving sustainability.
The cultural economy, a major draw for overseas travellers, will also benefit. GST on traditional art and cultural goods, from statues and lithographs to stone inlay work, has been reduced to 5%. This not only helps artisans sustain India’s living heritage but also expands the availability of authentic souvenirs and collectibles for international visitors.
Framed under Prime Minister Narendra Modi’s vision of sustainable and inclusive growth, the reforms are expected to generate jobs in hospitality, transport, and cultural industries while deepening India’s positioning as a value-driven, culturally rich global destination.
With global travel demand climbing, India’s bet on tax reforms could turn its post-pandemic rebound into sustained growth, reinforcing the country’s image as a welcoming, cost-effective destination for foreign tourists.
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