Indian airport operators push for doubling of duty free liquor and value allowances

INDIA. The Association of Private Airport Operators (APAO), which represents seven Public-Private Partnership (PPP) airports in India, is pressing for the duty free liquor allowance to be doubled from two litres to four.

The Association, whose members operate five existing airports in Bangalore, Cochin, Delhi, Hyderabad, and Mumbai and two under construction in Mumbai and Goa, made the call in a representation to various government authorities issued in advance of the 2021 Budget session.

APAO is also seeking to double the duty free baggage (value) allowance from Rs50,000 (US$685) – provided the purchase is made in an Indian airport.

“The liquor allowance given in India is not at a par with the liquor allowance in neighbouring countries/Asia Pacific countries,” APAO said in the document, supplied to The Moodie Davitt Report by Secretary-General Satyan Nayar.

“A sizable business at duty free operations in the Southeast Asia and Middle East region is through tourists that originate from India. Indian passengers purchase duty free goods outside India, thus depriving the opportunity to India’s duty free business.

“65-70% of all duty free business in Indian airports happens in arrival, hence an increase in allowance will help enhance the overall business,” APAO added.

APAO represents some of the country’s most progressive airports

The association said that the enhanced revenues generated by the increased allowance would help all Indian airports bring down costs and pass on the benefits to passengers. “AAI [Airports Authority of India] would benefit significantly from an increase in revenue in directly managed airports due to higher revenue share earnings from duty free operators and their joint ventures,” APAO said.

Speaking about the value allowance, APOA said: “With the overall increase in tourism, the customers are also experiencing a new shopping experience at duty free shops at Indian airports. Customers are now seeking exclusive and premium items which they are unable to buy due to the lower limit of allowances.

“The present limit of Rs50,000 has remained stagnant since April 2016 and with the overall increase in inflation, the effective allowance has gone down. 65-70% of all duty free business in Indian airports happens in arrivals, hence an increase in allowance will help enhance the overall business.”

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