Opinion | Why Cruise Tourism In India Remains Stuck In Shallow Waters

When the film Titanic, based on the Titanic cruise ship's tragedy, was released in 1997, there was apprehension within the cruise tourism industry, especially in Europe, that it would sink the market. However, this fear was unfounded. For Europe's cruise industry, Titanic led to a 20% increase in cruise ticket sales.

Far away in India, the iconic film remains in public consciousness. The 'I am flying' pose of Kate Winslet and Leonardo DiCaprio is one of the most imitated scenes here. At the time the ship sank tragically, India's cruise tourism industry was in its nascent stage, and such a sequence could only be dreamt of. Not much has changed since then. Even now, the cruise tourism market in India is only valued at $100 million- just 1% of the $8 billion global market.

Cruise tourism has significant potential for growth, given India's extensive coastline and over one hundred navigable rivers. The 2024 Budget includes some tax incentives for foreign cruise liners, but this is not sufficient. While this can be seen as a progressive step, experts believe that real corrective measures would involve addressing the infrastructure gaps that have hindered the growth of the cruise industry.

Huge Possibilities

The Indian Ministry of Tourism drafted a national strategy for cruise tourism in June 2023 to promote India as a preferred destination for cruise tourism and coastal, ocean, river, and yacht cruises. This was followed by two thematic discussions on cruise tourism during India's G20 presidency, held on the sidelines of the 4th Tourism Working Group Meeting in Goa, which concentrated on the challenges and opportunities of positioning India as a cruise tourism hub.

With more than 7,500 km of coastline, dotted with 12 major and 200 minor ports, and 20,000 km of navigable inland waterways, there are massive possibilities for developing coastal and river cruises in India. The country's 1,300 islands, particularly in the Andaman and Nicobar Islands and Lakshadweep, can serve as additional attractions as cruise destinations.

Existing cruise ports like those in Visakhapatnam, Mumbai, Mormugao, New Mangalore, Kochi, Chennai, and Tuticorin have seen an increase in international cruise liners following their modernisation, development, and upgrading. According to the Ministry of Shipping's projections, the number of cruise passengers (both domestic and foreign) is set to surge from 472,000 in 2022-23 to 5 million by 2047. Similarly, the number of cruise ships is expected to increase to 500 by 2030, and up to 1,100 by 2047.

"Visakhapatnam Port has full logistics in place to handle 2,000 tourists per day. We are working with the government of Andhra Pradesh to encourage and identify destinations to showcase and attract tourists. We are also working with various global cruise liners and expect their regular presence at Visakhapatnam Port," says M Angamuthu, Chairman of the Visakhapatnam Port Authority. Additionally, there is demand from international cruise carriers to visit domestic destinations such as Lakshadweep, the Andaman and Nicobar Islands, and Pondicherry.

Equal Treatment

Currently, a few international cruise companies operate in India's coastal waters, while domestic operators mostly manage inland cruises in Kerala's backwaters, the Ganga, and the Brahmaputra. Foreign cruise liners have shown interest in the Indian market, but infrastructure shortcomings, both at ports and on land, along with a limited number of tourist destinations and cumbersome regulatory processes, deter them from entering the domestic segment.

"The primary requirement of the sector is to create water-to-land connectivity infrastructure. It is crucial to identify as many destinations as possible along the coastline to establish smaller piers and quays at these locations for shore excursions," says Mr Sanjay Basu, Chairman of M/s Adventure Resorts & Cruises Private Limited.

He suggests small-scale infrastructure for smaller ships with 50-200 cabins that can operate in shallower waters, staying in India for six to eight months rather than just six to eight days.

"The maximum real-time economic benefit will come from ships operating in home waters, as they will completely bunker, provision, staff, and conduct shore excursions entirely within India, rather than just visiting one or two ports for an afternoon of sightseeing," he adds.

In the 2024 Budget, a simpler tax regime for foreign shipping companies operating domestic cruises has brought some relief. A specific provision has been introduced whereby only 20% of the amount received by non-resident cruise ship operators for the carriage of passengers will be considered income and taxed accordingly. Additionally, lease rentals paid by non-resident cruise ship operators will be exempt from tax in the hands of the recipient foreign company until the assessment year 2030-31, provided both companies are subsidiaries of the same holding company.

However, this isn't enough. "This is a good amendment and a relief for these big ship operators. But it is only limited to foreign cruise companies, and the same benefit should be extended to Indian companies as well, allowing them to bring ships from abroad to operate here, so as to rapidly scale up the country's capacity," says Basu.

A great deal of work needs to be done by the states in terms of providing proper itineraries and improving destinations for cruise tourism to attract international cruise tourists and facilitate further growth. Infrastructure at existing ports also needs to be enhanced to accommodate cruise passengers. These measures will boost the local economy and create employment in these tourist hubs. Moreover, there is growing interest among domestic tourists, as cruising is a new concept for holidays and vacations in India. Previously, it was considered a luxury travel option and out of reach for the majority. If cruising is made more affordable in our rivers and waterways, India's vast middle class could form a huge pool of clients.

Perhaps an Indian TV serial or film shot on a luxury cruise ship will help ignite the interest of Indians in the same way the legendary American comedy-drama The Love Boat, which aired in 1977, did for the American cruise industry!

(Bharti Mishra Nath is Contributing Editor, NDTV)

Disclaimer: These are the personal opinions of the author