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Cruise Lines Association presents white paper to Nitin Gadkari

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India Cruise Lines Association (INCLA), the only association of cruise lines in India, recently presented a White Paper titled “Recommendations for the Indian Cruise Industry” to Nitin Gadkari, minister of road transport and highways, shipping and water resources, river development and Ganga Rejuvenation, Government of India, in the presence of Gadkari said, “Cruise tourism has a big scope in India and can become an economically viable and profitable sector. With a potential of one crore cruise tourists, we sense an opportunity for 25 lakh jobs that will greatly benefit the economy.”

He added, “India has been aggressively developing the potential of its rivers and seas and we have already received interest from foreign players to set up manufacturing of hovercrafts, seaplanes among others in the country. The ministry has also recently resolved the issues regarding Cabotage laws and will look at the charter of demands from industry stakeholders to resolve them at the earliest to promote cruise tourism.”

Subhash Chandra, chairman ZEE, Essel Group, who was also present on the occasion said, “It is now or never; the cruise industry should handle five million passengers by 2020. At Essel Group, we have begun cruise business with the commitment to give people a great experience. As an industry leader we feel the proliferation of cruise tourism will bring one million jobs in the next three to four years. We will provide a homegrown alternative for Indians, who are presently going abroad to enjoy cruises.”

INCLA has been formed by leading cruise liners and other stakeholders from around the world with the objective of creating a roadmap for the development of the cruise sector in India and also to highlight various issues being faced by the Indian cruise industry, reforms required to address the said issues and to ensure that reforms are implemented effectively at ground level.

Sanjay Bhatia, chairman, Bombay Port Trust and chairman, Indian Ports Association, said, “There are been a strategic shift in thinking regarding utilization of ports in India. We are planning to transform ports to support cruise tourism. The government is working very closely and several reforms, including reducing tariffs at five ports including Mumbai, Goa, New Mangalore, Kochi and Chennai have been undertaken.”

The viability of domestic and international cruise tourism originating from India was enthusiastically discussed amongst eminent panelists.

Nalini Gupta, executive committee member, INCLA said, “The opportunity is huge and the market is hungry for cruise tourism. We believe that the Indian government has a vision to promote marine economy. A few years ago there were some grey areas and hence there were considerable apprehensions among industry players. INCLA will collaborate with government and stakeholders to bring clarity in policy to boost cruise tourism in the country.”

Jurgen Bailom, convener, INCLA, said, “Economies world-over are gaining immensely from cruise tourism owing to stakeholder friendly policies, evolution of customer needs and rapid development of infrastructure. With INCLA, we hope to bring in a transformation in the Indian waters, which are yet to be explored and experienced by tourists in India.”

This white paper has been prepared by INCLA with a view to highlight the necessary changes/ clarifications in policy, various tax and regulatory laws, at the earliest to ensure a level playing field for cruise business in India compared to cruise operators based abroad and attract investors/cruise liners and other stakeholders to set-up cruise operations in India.

The following are the INCLA Recommendations for Indian cruise industry:

(a) Indian cabotage laws to be further liberalised to allow foreign cruise ships to ply in Indian waters indefinitely

(b) Development of ports and related infrastructure as per international standards (c) Relaxation of immigration regulations including visa regulations, filing of passenger manifest and issuance of Standard Operating Procedures on training and education of personnel handling the passengers

(d) Relaxation of custom laws and regulations relating to declaration of inventory and stocks present on-board a cruise ship and sealing it

(e) Relaxation of Indian entertainment and gambling laws for cruise liners

(f) Introduction of capital subsidy for sea/ocean cruises considering the capital intensive nature of cruise industry

(g) Direct tax reforms in the form of following clarifications under the Indian tonnage tax scheme

i. Requisite clarification for cruise ship to be specifically included under the definition of ‘Qualifying ship’

ii. Clarification that income from sale of goods / provision of services on-board a cruise ship forms part of core activities of cruise business

(h) Relaxation of taxation provisions for international seafarers

(i) Requisite amendments under the Goods and Service Tax Law

(j) Permissibility of foreign direct investment in casinos operated on-board a cruise ship

The growth of cruise sector in India would lead to substantial development of local tourism economy and other allied sectors like hospitality, transportation, etc., thus leading to increase in tax revenues for the government and generation of employment. In addition to the above, favourable reforms for cruise sector in India would also have positive impact on following areas:

(i) Facilitating backward and forward integration of allied businesses

(ii) Earnings in foreign exchange due to spending by foreign tourists / cruise liners and limiting the outflow of foreign exchange due to Indians opting overseas cruises

(iii) Potential of promoting the ‘Skill India’ mission by boosting skill development and generation of employment

(iv) Procurements by cruise liners and tourists from India to promote ‘Make in India’ initiative

(v) Facilitating simpler tax and regulatory processes to promote ‘Ease of Doing Business in India’

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