Amsterdam, the capital of the Netherlands, usually sees its population take a ferry or a cruise on weekends to travel within the country. The network of canals has been designed in such a manner that people find it convenient to traverse the length and breadth of the country using water transportation. Now, what if we were to tell you that very soon you could do that in India as well? Yes, you read that right. Efforts are on in full swing to promote cruise tourism in the country for local, as well as international travellers. In August, Sanjay Bhatia, chairman, Mumbai Port Trust (MbPT), said five major ports in the country—Mumbai, Mormugao, Mangalore, Chennai and Cochin—would cut berthing charges for vessels. “We will soon be announcing rationalisation in berthing charges for vessels, so that we can compete with other ports such as Singapore and Colombo to attract more cruises,” Bhatia said.
Not just that, in August this year, Italian luxury cruise liner Costa Cruises, in collaboration with the Maharashtra Tourism Development Corporation and MbPT, announced the launch of India’s first domestic luxury cruise, Costa neoClassica, in the Mumbai-Cochin sector. As per the company’s website, the first cruise set sail on November 25.
Then in November, the government introduced e-visa facility for international passengers. “(The) e-visa (facility) is available in only a few countries at present and we are starting it here for cruise passengers,” Bhatia said. The chairman of MbPT also heads the committee that has been set up to chalk out standard operating procedures for all stakeholders in this regard.
Clearly, the government is serious about promoting the country as a cruise destination. In October last year, Bermello Ajamil & Partners (B&A), a US-based architecture and engineering firm, was appointed as a consultant to prepare a roadmap for cruise tourism in India. As per their June report, the potential for cruise tourism in India is enormous. Coastal tourism alone has the potential to create 2.5 lakh jobs and generate revenues of over `35,000 crore—no time period has been specified though. It also says the number of Indians taking a cruise would increase to 40 lakh from two lakh currently—around 80%, or 32 lakh, of these passengers are expected to take cruises from the Mumbai port.
Work in progress
The biggest plus in India’s favour is its long coastline, which measures upwards of 7,000 km. But a lot of work needs to be done before India can boast of being a cruise destination. “We are nowhere in the global cruise market yet. We need to bring it to a level where we can compete with the likes of China, which has grown tremendously in the past five years. We need to get India onto that platform as fast as possible,” says Ratna Chadha, chief executive, TIRUN, a cruise travel provider and exclusive India representative of Royal Caribbean Cruises, a US-based cruise line brand. “In China, decisions are taken faster, as they work in an autocratic set-up. Everything is taken into consideration and once a diktat is given, they are ready to go,” says Chadha, who is also on the committee headed by MbPT’s Bhatia.
As per the B&A report, Mumbai could be the biggest beneficiary of cruise tourism in the country. It’s no wonder then that it’s being prepped to become an international cruise destination. The MbPT plans to build a cruise terminal with hotels, shopping areas and separate lounges for arrivals and departures in the city. Spanning over 34,000 sq m, the terminal will be equipped to process large cruise ships, carrying 4,000 passengers. The contract for the work, worth Rs 197 crore, has been awarded to the Mumbai International Cruise Terminal. “(Union minister for shipping and water resources) Nitin Gadkari is very gung-ho about Mumbai. He is investing a lot of money to build the infrastructure. But that is from the long-term prospect of building Mumbai as a home port rather than a turnaround,” Chadha says, adding that other states, too, should have the same infrastructure. “You can’t have domestic tourism with only Mumbai coming up with the infrastructure. You need the infrastructure in other states as well. When ships go from Mumbai to Goa or Cochin, the facilities have to be similar, if not better, there.”
Chadha is right. If India has to boost cruise tourism, it needs to woo investors. “The government can’t make any investment in the equipment, it can ease the processes or policies. The only and fastest way to bring India on the tourism map is to get companies and investors to invest here,” Chadha says, adding, “It has a multiplier and economic effect. It will generate employment, facilitate national integration and help people see different parts of the country with ease.”
One of the biggest challenges to cruise tourism’s success in the country could be the goods and services tax (GST). While there is currently no service tax applicable on services provided to passengers on cruise ships in the country, the new tax regime has brought in great uncertainty. In July, the Union shipping ministry had written to the GST Council, asking that cruise tourism—which is touted to attract 40 million passengers in India by 2042-43 as per the shipping ministry—be exempt from the tax.
The fear is justified. At a business conference in Mumbai in August, David Dingle, chairman, Carnival UK, the world’s largest cruise shipping company, showed scepticism about India’s future as a cruise destination in the face of GST. “The cruise industry pays its way through head charges and port taxes. It must not attract any GST whatsoever. The cruise industry will not come to a country where GST is implemented,” Dingle, whose company operates popular cruise firms, such as Costa Cruises, Cunard Line, Princess Cruises, Carnival Cruise Line, etc, said. “Quite simply, we can’t pay GST on cruise shipping. It will limit the growth of the cruise shipping industry in India. The finance ministry needs to listen to its colleagues in the shipping and tourism ministries.”
Chadha agrees with Dingle. “You can’t make a product more expensive because it’s coming to your country. What you’re doing then is deterring people. A three- to four-night cruise in Singapore costs a person $100 a night. The same cruise from India would cost $120 once GST is levied,” she says. This also increases the cost of facilities on the cruise, such as liquor and shopping. “Whatever is offered onboard is consumed onboard. So why should there be GST?” Chadha asks.
Apart from GST, issues related to infrastructure and procedural hassles for tourists also pose a big challenge for the industry. And these have been raised time and again by the shipping ministry. Speaking at the ‘Dawn of Cruise Tourism’ conference in August this year, Gadkari had said, “The right market atmosphere, easy immigration process, security procedures that don’t impede movement, taxation regime that allows for a platform for growth, customs and duties procedures that don’t tie the industry” are key steps the ministry has underscored to unleash the potential of the sector.
He added, “The ministry has recommended a single-window system for all pre-cruise requirements for cruise operators—a separate dedicated approach road and entrance to cruise terminals; uniform and consistent security procedures at all ports; coordination between immigration and Central Industrial Security Force; use of technology in clearance; implementation of green lane/red lane at existing terminals with random custom checking; declaration of only limited items of inventory of cruise ships in place of the existing requirement of having the complete inventory for all the stocks in the ship.”
Clearly, a lot needs to be done before the ship can sail.