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Growth of cruise tourism in India hindered by tax structure, says tourism ministry

In 2022, it was estimated that the global cruise tourism market was around $8 billion but the Indian market was just around $100 million.

NEW DELHI: The prevailing Goods and Service Tax (GST) regime and lack of coordination among government agencies have been identified as ‘threats’ to the potential growth of cruise tourism in India in the draft of the National Strategy for Cruise Tourism (NSCT) released during the G20 tourism group meeting held last week.

“The tax structure including GST, tax collected at sources (TCS) and customs duties is an urgent area to be addressed to enhance cruise tourism in a holistic manner…The country’s current GST rate and structure may prove to be an impediment in growth of the cruise tourism industry in India as compared to international benchmarks,” states the SWOT analysis, which is part of the draft prepared by the ministry of tourism.

The document further suggests integration and coordination between various government bodies at central and state level and a national coordination body to facilitate ease of doing business.

Ministry officials said that the NSCT had been placed in the public domain inviting suggestions and comments from stakeholders. After analysis and incorporating the feedback if required, the document will be finalised and notified, officials added.

According to the draft of the policy, India has significant capabilities in cruise tourism for the coastal and river sector given the presence of 12 major and 200 minor ports along the 7500 km long coastline and a network of more than 20,000 kilometres of navigable waterways connecting around 400 rivers in the country.

It says that coastal and river cruise tourism is capable of generating direct employment, demand for tourism, hospitality, restaurant, local transportation and shopping goods and services.

In 2022, it was estimated that the global cruise tourism market was around $8 billion but the Indian market was just around $100 million, a share of around 1 percent, despite all the competitive advantages India has globally in cruise tourism.

Considering the availability of immense natural water assets, the ministry has identified eight strategic pillars as part of the integrated cruise tourism policy including ease of doing business, integrated tourism around cruise terminals, fiscal support, skill development and institutional structure.

The ministry has also proposed a national level body — National Cruise Tourism Board — to ensure that cruises are used as a tool to drive tourism into and within India.

“To position India as a cruise tourism destination, a sub brand ‘Incredible Cruises in India’ will be developed, which will become the flag bearer of all cruise tourism events in India,” read the draft.

 

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