Calls for simpler regulations for hotels, homestays, tourist transport and hospitality sector
Srinagar, June 30: NITI Aayog has proposed a comprehensive package of regulatory reforms aimed at unlocking India’s tourism potential by making it easier to invest, build and operate tourism businesses across the country.
In its latest report, Unlocking Growth in Tourism and Hospitality Sector: Recommendations for Non-Financial Regulatory Reforms, the policy think tank says India possesses world-class natural and cultural assets but continues to underperform because cumbersome regulations, fragmented approvals and high compliance costs discourage investment in tourism infrastructure.
The report argues that improving the ease of doing business in tourism is essential for expanding accommodation capacity, improving visitor experiences and achieving India’s long-term target of building a USD 3 trillion tourism economy by 2047.
Among its key recommendations, NITI Aayog has called for liberalising building regulations for hotels by increasing permissible Floor Area Ratio (FAR), removing restrictive ground coverage norms, easing minimum plot-size and road-width requirements, rationalising parking norms and raising high-rise thresholds. The report says these measures would reduce construction costs, improve project viability and enable developers to build more hotel rooms on available land.
The report notes that hotel projects in India currently take between 36 and 48 months from approval to commissioning, compared with just 12 to 18 months in competing ASEAN countries, resulting in higher financing costs and delayed supply creation.
Recognising the growing role of alternative accommodation, NITI Aayog has also recommended simplifying regulations governing homestays by removing unnecessary No Objection Certificate (NOC) requirements from local authorities and increasing the cap on the number of rooms that may be offered by homestay operators. It cites examples from states that have eased such requirements to encourage the growth of registered homestays.
To reduce compliance burdens on hospitality businesses, the report recommends eliminating duplicate approvals, introducing a single Health Trade Licence for hotels, delinking hotel star classification from statutory approvals, integrating departmental clearances through digital single-window systems and reducing recurring licence renewals. It observes that hotels currently require around 60 approvals during their lifecycle, while food and beverage establishments often need nearly 30 licences from multiple authorities.
The report also seeks major reforms in tourist transport by recommending longer validity for All India Tourist Permits and the removal of state-level entry taxes and fees imposed on tourist vehicles. According to NITI Aayog, harmonising permit rules and eliminating overlapping levies would reduce operating costs and improve interstate tourist mobility.
Among other recommendations are the introduction of an environmental reclassification framework that rewards hotels adopting cleaner technologies with lighter regulatory requirements, and reforms to India’s visa regime, including expanding visa-on-arrival, simplifying digital visa processes and encouraging multiple-entry tourist visas to attract more international visitors.
The report concludes that India’s tourism constraints lie less in the availability of attractions and more in regulatory inefficiencies that delay investment and increase business costs. It identifies restrictive standards, redundant approvals, fragmented processes and recurring compliance requirements as the principal barriers to faster tourism sector growth.
For Jammu & Kashmir, where tourism is a key pillar of the economy, many of these proposed reforms could help accelerate investment in hotels, resorts, homestays and tourism-related infrastructure while reducing procedural hurdles for entrepreneurs and transport operators. If implemented by the Union and state governments, the recommendations could strengthen the region’s capacity to accommodate growing tourist arrivals and improve the overall ease of doing business in the tourism sector.
