A.S. Lal: Inbound duty free allowances limit should be raised to US$1,000

INDIA. Kreol Travel Retail CEO A.S. Lal has called on Indian authorities to further raise the inbound duty free allowance for returning residents to US$1,000, following Budget changes announced earlier this month.

As reported, the duty free value allowance has been raised to IR45,000 (US$750) from IR35,000 (US$585) for all passengers aged ten years or above and returning to the country after being away for more than three days. This spells positive news for offshore airport travel retailers serving India-bound passengers who buy gifts for family and friends. [More dramatically for the industry, the same Budget halved the inbound duty free tobacco allowance to 100 sticks, 25 cigars or 125 grams of tobacco – Ed].

But A.S. Lal – whose company operates duty free at Cochin Airport in a joint venture with World Duty Free Group – has said that even the higher allowance limits restrict passengers’ ability to shop in Indian arrivals.

He said: “I believe that US$1,000 should be the duty free allowance for arriving passengers. Right now, due to the limited allowance, inbound passengers buy products in departing countries and India loses out on market share.

“If the customer wants to purchase more than the allowed amount, we have to inform the customs department. The ensuing complicated documentation irritates customers to the point that they often get aggressive with shop staff because departing airports did not ask them these questions nor place any restrictions on quantities purchased. Every time such an incident takes place, the customer angrily vows not to come back to the shop.”

He added: “If we look at the data of departure shop sales at airports in the region, Indian passengers spend much more abroad than at the arrivals shops in Indian airports. Yet duty free outlets at airports in India today have got competitive pricing and product assortments [and] excellent ambience and attention to customer requirements. Our key issue now is the limit on purchases. Indian airport arrival shops generate more sales than their departure stores; which is clear evidence to improve the allowance and support the industry.”

The Asia Pacific Travel Retail Association (APTRA) has been urging increases to allowance limits for some time.

Lal concluded: “I appreciate APTRA’s initiative in this matter and appeal to all stakeholders to join hands in pushing our common cause forward. I sincerely hope the Honorable Finance Minister considers our request to support the industry.”

Alpha Kreol India: Despite rising retail standards, Indian passengers still spend more in Departures shops overseas than at Arrivals shops in India, says the retailer