The announcement closely aligns with key recommendations made in the recently released PHDCCI Tourism & Hospitality Resilience Report titled ‘Impact of the West Asia Conflict on India’s Tourism, Aviation & Hospitality Sectors’, which highlighted the urgent need for targeted financial and policy support measures to stabilise India’s aviation and tourism ecosystem amid geopolitical disruptions.

The report had specifically recommended:

·       Rationalisation of Aviation Turbine Fuel (ATF) taxes and reduction of state VAT on ATF to 4–5% across major aviation hubs

·       Financial support and liquidity mechanisms for airlines and tourism businesses during periods of global disruption

·       Measures to strengthen operational sustainability, route viability and international connectivity

·       Dedicated working capital support for tourism MSMEs and travel operators

Welcoming the Government’s announcement, Mr. Rajeev Juneja, President, PHDCCI, said, “The Government’s swift intervention through the ₹5,000 crore emergency credit scheme demonstrates strong policy responsiveness towards one of the most critical pillars of India’s services economy. Aviation is the backbone of tourism, trade and business mobility and supporting airline stability at this juncture will have a cascading positive impact across the broader economy, including hospitality, travel services and employment generation.”

Mr. Anil Parashar, Chair – Tourism & Hospitality Committee, PHDCCI, said, “The recommendations outlined in the PHDCCI Tourism & Hospitality Resilience Report specifically emphasised the importance of financial resilience mechanisms and liquidity support for aviation and tourism stakeholders during periods of geopolitical uncertainty. This announcement is therefore a very positive step towards safeguarding connectivity, sustaining tourism flows and maintaining economic stability across the sector.”

Dr. Ranjeet Mehta, CEO & Secretary General, PHDCCI, added, “The current geopolitical situation has highlighted the deep interdependence between aviation connectivity and tourism growth. Timely financial support measures such as this will help airlines maintain operational continuity, preserve consumer confidence and minimise disruptions across the travel ecosystem. Going forward, continued collaboration between government and industry will be essential to strengthen long-term resilience and competitiveness.”

The report also observed that higher operating costs and limited seat availability could impact inbound tourism demand from long-haul markets such as Europe and North America, where travellers are increasingly sensitive to airfare levels and travel duration.

PHDCCI further stated that continued policy support in areas such as ATF cost rationalisation, reduction in VAT on aviation fuel, strengthening travel facilitation mechanisms including e-Visas and improving liquidity support for tourism MSMEs will remain important for sustaining India’s long-term tourism competitiveness.

The PHDCCI Tourism & Hospitality Resilience Report can be accessed here:

https://phdccitourismhospitality.in/wp-content/uploads/2026/04/PHDCCI-Tourism-Hospitality-Resilience-Report-1.pdf

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