Monday, August 5, 2024 Cruise operators are increasingly concerned about regulatory challenges, such as the prohibition of casinos along the Indian coastline, with the exception of Goa. Casinos enhance the allure of cruises, drawing in travelers looking for entertainment and leisure activities. The ports in Visakhapatnam, Mumbai, Mormugao, New Mangalore, Kochi, Chennai, and Tuticorin have successfully attracted international cruise liners, yet the cruise tourism market in India remains modest at $100 million, which accounts for merely 1% of the global market.
This limited market share exists despite India’s vast potential for growth, given its extensive coastline and over a hundred navigable rivers. The 2024 budget introduced some tax incentives for foreign cruise liners, representing a positive development. However, industry experts highlight that significant infrastructure gaps continue to impede the sector’s expansion.
Examining the current taxation regime, no specific concessions under the Goods and Services Tax (GST) have been proposed for the cruise industry, with ticket sales continuing to incur an 18% GST. For non-resident cruise ship operators, a particular provision has been established, wherein only 20% of the revenue generated from passenger carriage will be considered taxable income. This move aims to provide some relief to foreign cruise companies, although it might not be sufficient to spur substantial growth in the market.
Additionally, the budget has introduced a tax exemption on lease rentals paid by non-resident cruise ship operators to foreign companies, effective until the assessment year 2030-31. This exemption applies only if both entities are subsidiaries of the same holding company. While this measure is intended to reduce the financial burden on foreign operators, it is seen as a minor adjustment rather than a transformative change for the industry.
Despite these fiscal measures, the absence of substantial infrastructure improvements remains a critical barrier. India’s ports and related facilities are not yet equipped to handle the scale and demands of a thriving cruise tourism industry. Enhancing port infrastructure, streamlining customs and immigration processes, and upgrading transportation links are essential steps that need to be taken to foster growth in this sector.
In conclusion, while the 2024 budget’s tax incentives are a welcome step towards supporting foreign cruise liners in India, they fall short of addressing the larger issue of inadequate infrastructure. The cruise tourism market in India holds immense potential, but realizing this potential will require a concerted effort to improve port facilities and related services. Only then can India aspire to significantly increase its share in the global cruise tourism market.
To truly unlock the potential of cruise tourism in India, a comprehensive strategy encompassing both fiscal and infrastructural improvements is necessary. This strategy should include the development of state-of-the-art port facilities, efficient and welcoming customs and immigration procedures, and enhanced connectivity between ports and key tourist destinations. Collaboration between the government, private sector, and international cruise operators will be crucial to ensure that these enhancements are implemented effectively and sustainably.
Moreover, marketing and promotional efforts must be intensified to showcase India as a premier cruise destination. Highlighting India’s diverse cultural heritage, scenic beauty, and unique travel experiences can attract more international tourists. Developing themed cruise itineraries that explore lesser-known but captivating regions of India can also add to the country’s allure.
By addressing both infrastructural and promotional aspects, India can position itself as a competitive player in the global cruise tourism industry, ultimately increasing its market share and economic benefits.bal cruise tourism market..
