The Government of India has identified 5 major ports to boost the cruise tourism. These ports are Mumbai, Mormugao, Mangalore, Chennai and Cochin.
The Union minister for shipping Nitin Gadkari said that government is now looking to increase the tourism industry by establishing the cruise and its packages for the national and international tourists.
While the number of Indians who took a cruise in 2016-17 was 2 lakh, the number could go up to 40 lakh, Of this, 80% or 32 lakh passengers are expected to take cruises from the Mumbai port alone.
However, Nitin Gadkari also added that the cruise tourism industry is facing many economic challenges on many administrative and infrastructural issues and that he would make a representation to the finance ministry to give up the goods and services tax (GST), levied at 5% currently on all cruise ships, as well as establish a zero income tax regime.
Carnival PLC, the largest cruise operator is looking to increase the number of cruise liners in India, which will give a surge in nearby tourism from the mainland like Lakshadweep and Andaman and Nicobar Island.
David Dingle the Chairman of Carnival PLC said that India must create a domestic cruising tax regime competitive with tax regimes elsewhere in the world. It will help to generate the tourism opportunities for the domestic tourists.
David Dingle also added that it is not possible to operate the cruises where it has to pay GST on the ticket price and on the sales made on board. Carnival will not bring the ships here in any significant numbers all the while that cruising attracts any GST.
Moreover, Dingle added that the international cruise companies have the right to repatriate their profits through double tax treaties.
Carnival PLC sold 181,000 cruises in India in the year 2016, registering a compounded annual growth rate of 31%.
The current estimates are that over 120,000 Indians book a cruise each year with over 90% of them travelling to Singapore to board a cruise liner.
To make the cruise tourism a growing market, the Indian government wants to increase the number of cruise liners that come to India, eliminating the need for cruise seekers to fly abroad to board a ship.
The coasts of India saw about 150 cruise ships visit in 2016. The central Government is aiming to increase this to about 955 in the next few years. Indian Government in the midst of GST is hopeful for the promotion of luxury tourism.