Odisha slashes investment norms in tourism, boosts subsidies; cabinet clears proposal

In a major reform initiative aimed at strengthening Odisha's tourism sector and aligning it with the State's Vision-2036 and 2047, the State Cabinet on Friday approved the Odisha Tourism (Amendment) Policy-2026. 

As per sources, the amendments seek to enhance investment competitiveness among states, promote sustainable and experiential tourism, encourage private sector participation, and ensure balanced regional development across the State. To improve ease of doing business and attract a wider range of investors, the Cabinet has approved a reduction in the minimum investment threshold for 3-Star and above hotels and resorts from 50 keys to 10 keys, in line with the norms of the Ministry of Tourism, Government of India. Expansion norms for existing tourism units have also been rationalised by reducing the eligibility threshold from 50% to 25% of existing capacity, enabling easier and faster expansion of operational units.

The Capital Investment Subsidy (CIS) framework has been rationalised into two clear slabs to provide stronger and more predictable support to investors. Tourism projects will be eligible for CIS at 30%, capped at INR 50 cr for investments up to INR 200 cr and INR 100 cr for investments above INR 200 cr.

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The Cabinet has also approved the expansion of Special Zones to include high-potential tourist destinations such as Hirakud, Satkosia, Similipal, Ratnagiri-Udayagiri-Lalitgiri and Bhitarkanika, in addition to the existing special zones of Chilika, KBK, Kandhamala and Gajapati. Tourism projects located in these Special Zones, as well as projects promoted by women, scheduled castes, scheduled tribes and differently-abled entrepreneurs, will be eligible for enhanced Capital Investment Subsidy at the rate of 40%, subject to a ceiling of INR 60 cr for projects with investment up to INR 200 cr and INR 120 cr for projects with investment exceeding INR 200 cr. 

Targeted subsidies have been introduced for a range of emerging tourism segments, with museums and heritage properties eligible for capital support of up to 40% and electric boats, electric caravans and art and craft theme complexes eligible for capital support of up to 50%. These incentives are intended to diversify Odisha's tourism products and promote new-age, sustainable and experiential tourism offerings across the State.

In order to respond to evolving tourism demand, the amended policy introduces focused incentives for segments such as MICE, destination weddings, luxury camping, and electric mobility-based tourism products. In addition, a dedicated Capex and Opex support framework has been introduced for promotion of authentic Odia cuisine through support to Odia cuisine restaurants at Department of Tourism notified tourist destinations within Odisha, as well as outside the State in five metro cities namely Mumbai, Delhi, Bengaluru, Chennai and Kolkata and at five major tourist destinations namely Agra, Varanasi, Goa, Kochi and Jaipur, with the objective of strengthening Odisha's culinary identity and expanding its national and international visibility.

The Cabinet has also approved incentives for tourism service providers and homestay owners to participate in domestic and overseas tourism promotion events, thereby strengthening Odisha's visibility in national and international tourism markets.