As already reported in The Business last June, the India Tourism Development Corp (ITDC) is to look for a foreign partner to try and maintain its presence at the country's two leading and recently privatised

airports of Mumbai and New Delhi and possibly look for new business outside of India.
Speaking to the Economic Times newspaper ITDC Vice-President Duty Free Trade NK Piplani repeated comments made to The Business earlier this April that ITDC would look for a partner to take a 51% share in a new venture and might also look for additional business outside of India.
Piplani said that the new joint venture would bid for any new airport duty free contracts in India, although ITDC itself has not been shortlisted for the Bangalore contract and the consortiums that won Delhi and Mumbai have not announced any tender timetables yet.
Currently, ITDC operates duty free outlets in several international airports, including Delhi, Mumbai, Kolkata, Bangalore, Calicut and Goa, although more than 75% of its $34m total sales turnover in 2005 was generated at Mumbai and New Delhi with a heavy reliance on arrivals duty free sales.
But the state-owned company has come under increasing pressure from rivals Flemingo International and Alpha Retail who have both gained considerable chunks of regional duty free business in the country and Piplani knows that the pressure is on as his comments to The Business showed: ?We do not want to blow it. We have done a lot of hard work to get from US$16m to $34m sales in the past three years,? said Piplani.
He repeated his comments to The Business to the newspaper, saying that the company plans to open outlets at Munabao railway station in Rajasthan, as well as establish new seaport shops in the country.

COMMENT: Several years ago ITDC seemed to have it all when it had a joint venture with Gebr Heinemann. Top quality joint venture consultants Heinemann at its finger tips, no significant competitors and an Indian establishment that even cancelled one bid when the then Weitnauer Company (now Dufry) dared to win it. But it has had a long decade-plus history of friction in its dealings with the Airports Authority of India (AAI) and while it has made improvements to its operation, these have been reactive rather than ‘proactive’.
It will be interesting to see whether it will be able to defend its Mumbai and New Delhi airport duty free contracts when they finally go to tender even with a partner ? probably next year. The fact that it is even considering giving such a partner a 51% share in any joint venture may also carry a price, since ITDC knows that the financial price of holding on to these airports will be very high.
On its current rate of sales it will probably have to move up several gears in terms of any guarantees that it pays, since both private entities that now own New Delhi and Mumbai will be looking for guaranteed revenue levels that are on a par with those that top-class international airports can command elsewhere.