Grant Fleming, President, APTRA is pleased that no changes have been made to the Indian arrivals duty free allowance.

Delhi Duty Free services (DDFS) has unsurprisingly welcomed the Indian government’s decision not to reduce the country’s arrivals duty free allowance in the recent Union Budget.

As reported, the government planned to restrict liquor and tobacco purchases and reduce the total value of duty free goods travellers could bring into India when returning from abroad.

Alarmingly, the government is understood to have suggested halving the liquor allowance to one litre and eliminating the 100-stick cigarette allowance altogether.

But to the relief of the Indian travel industry, Indian Finance Minister Nirmala Sitharaman did not announce any arrivals cuts in the Union Budget on 1 February. Instead, she revealed plans to develop a further 100 Indian airports by 2024.

Delhi Duty Free Services (DDFS), which unveiled its new premium shopping experience for arriving and departing passengers at Delhi Indira Gandhi International Airport Terminal 3 last year, experienced a 28% surge in arrivals duty free liquor sales during the 2018/2019 financial year. This was despite the new arrivals store not opening until June 2018.

With 86% of liquor purchasers utilising their full arrivals allowance during the period, it is easy to see why the retailer is extremely relieved the arrivals allowance remained untouched.

DELHI DUTY TO LEAD ‘PARADIGM CHANGE’

Philip Eckles, CEO, Delhi Duty Free Services told TRBusiness: “We welcome the fact we are able to continue delivering revenues to the airport in line with previous expectations and are pleased that Delhi Duty Free is able to continue to help providing the infrastructure required to attract more passengers to India and specifically Delhi.”

Eighty six percent of liquor purchasers utilised their full arrivals allowance at Delhi Duty Free during the 2018/2019 financial year.

He added: “We look forward to continue providing all travellers to India with the fantastic products and services they have come to expect of Delhi Duty Free. We will continue to lead the paradigm change in travel retail in India and to provide an exceptional shopping experience to our customers every time they travel.”

The Indian government’s decision to maintain the status quo in terms of arrivals duty free allowances is a major triumph for the Asia Pacific Travel Retail Association (APTRA), which worked with the Indian government, duty free operators in the country and other industry associations to find a solution.

Grant Fleming, President, APTRA commented: “We are pleased that no reductions were made to the duty free allowance in India’s Union Budget 2020. We are grateful for the support of APTRA members in India, which brought vital knowledge and local insight to the table.”

Working alongside the Association of Private Airport Operators (India) and Airports Council International enabled a ‘timely representation’ back to the relevant government bodies, according to Fleming.

He added: “We also obtained further support as part of a broader industry approach that included fellow associations, Duty Free World Council and the European Travel Retail Confederation. Moving forward, we’ll keep a close eye on the situation, working with our members in the region to the continue the connection we have established with the Indian government regulators.”

Liquor and tobacco sales among Indian passengers comprise 40% and 5%, respectively, of the total departures business for Dubai Duty Free at Dubai International Airport.

Engaging Indian government regulators with the unique dynamics of the travel retail market is a prime objective. This is due to DF&TR’s valuable contribution to airport infrastructure and GDP, especially in emerging markets such as India.

“Industry collaboration plays a vital role in maximising our voice to stakeholders in national government,” commented Fleming. “This is an essential value running through APTRA’s mission and our core strategic pillars of advocacy, networking and knowledge.”

Should the allowances have been reduced, the impact would also have been felt strongly among Middle Eastern airports and operators, which serve high numbers of India-bound travellers.

Indian passengers are extremely important to Dubai Duty Free, for example, comprising 11% of total revenue. Crucially, liquor sales to Indian passengers make up 40% of departures sales alone.

A Dubai Duty Free spokesperson told TRBusiness: “Indian passengers also account for 5% of tobacco sales in departures, so all things considered we are very pleased the allowance was not reduced for liquor and tobacco.”