Moving out of airports due to stiff competition from private players, the India Tourism Development Corporation Ltd (ITDC) is making a gradual comeback with duty-free outlets at seaports. Currently operating at 11 seaports across the country, ITDC aims to cover all the major ports in the country with duty-free outlets by 2020. The seaport duty-free outlets are aligned with the Tourism Ministry’s ambitious plans to create cruise tourism around India’s coastal towns. Shopping facilities are part of this plan, said Vipin Garg, General Manager of ITDC. He said the ITDC outlets are seeing good footfalls from crew of cargo ships that arrive at these ports.
Apart from the standard alcohol, perfume, chocolates and cigarettes mix, Indian tea and tribal handicrafts are also making their way at duty-free shops. It generated revenue of Rs 18.96 crore from the duty-free business in 2016-17. According to industry sources, the size of the duty-free market in India is estimated at around $550 million and is expected to touch $1 billion by 2020. The global duty-free market is expected to touch US $64 billion by 2020, according to Verdict Retail, a retail information specialist. Its report says South Korea is the largest duty-free market, followed by China, but India is one of the fastest growing ones, and has forecast an annual compound annual growth rate (CAGR) of 20.7 per cent for India.
ITDC, a PSU of the Tourism Ministry, commenced its duty-free retail business with functioning of the first duty-free shop at then at Palam airport in New Delhi on September 1, 1967. ITDC operated duty-free shops at Delhi, Mumbai, Chennai, Bengaluru, Kolkata, Calicut, Thiruvananthapuram, Ahmedabad, Goa and Hyderabad airports till 2006-07. However, facing stiff competition from private players, it started moving out of the airports and shifted to seaports. In 2010, ITDC diversified into seaport duty-free business. It is currently operating at Chennai, Haldia, Kolkata, Goa, Paradip, Visakhapatnam, New Mangalore, Mumbai, Kakinada and Cochin Seaports. Krishnapatnam is the 11th seaport where ITDC has set up a duty-free shop.
“We have a mandate to be present at all the major seaports by 2020. Some shops are doing really well. Stores at ports like Paradip, Goa, New Mangalore and Cochin that have cruise liners, are doing brisk business. Chennai too is a promising location and once the cruise ships come in, we expect a bigger turnover,” Garg explained. About the turnover, he said: “The target for 2017 is around Rs 15.36 crore, of which we hope to make an approximate profit of Rs 2.5 crore. Last year, we achieved a turnover of more than Rs 18 crore, including one airport shop.”
Grappling with space constraints, the ITDC has trimmed its inventory to suit captains and their crew. “With limited space, we cannot keep a very big inventory. Our priority is that the products should be meaningful for the captain and crew,” he added. From airports to seaports, it’s a long journey that the state-run Corporation has covered since then.