Close on the heels of the Indian Government permitting cruise ships to start sailing in India in October, comes yet another welcome boost to help the industry get back on its feet. The Shipping Ministry recently announced the reduction in port tariff rates ranging from 60 per cent to 70 per cent for cruise ships with effect from August 14, 2020. There will be an immediate reduction in port charges for the Cruise Industry in line with the Indian Government policy to support the economy post the COVID- 19 pandemic.
Commenting on this development, Jurgen Bailom, Chairman, INCLA said, “The current upheaval caused by the pandemic has resulted in several challenges and has adversely affected tourism and the cruising sector. While we eagerly wait to begin sailing in November, the Shipping Ministry’s announcement to reduce berthing charges to promote tourism increases our optimism and confidence that our industry will get back on its feet in no time at all. We would like to express our gratitude and thank the Government and the Union Minister of State of Shipping, Mr. Mansukh Mandaviya for introducing this measure and assisting us during these trying times. This is a step in the right direction as it will help boost domestic cruise tourism.”
He further added, “The cruise industry appreciates the efforts, and is indeed grateful for this initiative, which no other country has implemented so far by such a margin. This news comes as a breath of fresh air. We are confident that the travel industry will bounce back, with a few adjustments in the post-COVID-19 world where global travel restrictions and changing consumer preference will provide the impetus to domestic tourism. As we all prepare to start cruising operations in November this year, we will rise to the occasion and create greater value for all our customers.”
Nalini Gupta, Vice President, INCLA, said, “I think this is a great initiative taken by the Shipping Ministry, to promote tourism which is one of the industries to have been seriously impacted globally due to the recent COVID- 19 pandemic. This will not only help make cruising more affordable for Indians but also make India look a lot more attractive to International cruise companies in terms of home-porting ships in India for itineraries covering Indian ports with neighbouring countries”.
Ratna Chadha, Vice President, INCLA said, “The Govt has taken an initiative to boost domestic Cruises by lowering the tariffs and thereby sending the right signal to the international cruise lines as well that, India means business. However, the duration of the validity may need to be extended to create a positive impact in the long term, both for the economy and employment.”
The Ministry of Shipping has rationalized tariff rates for cruise ships whereby which the net effect of the rate relaxation would be an immediate reduction in port charges ranging from 60 per cent to 70 per cent. This in turn will give substantial relief to the cruise industry in India, in line with the government policy to support the economy in COVID-19 pandemic situation.
The rationalized tariff rates for cruise vessels are as follows:
1) The port charges for a Cruise Ship to be charged at US$0.085 per GRT (Gross Registered Tonnage) instead of US$0.35 of current rate, for first 12 hours stay (‘Fixed Rate’) and US$5 per passenger (‘Head Tax’). The Ports will not charge any other rate like berth hire, port dues, pilotage, passenger fee, etc.
2) For the period exceeding 12 hours stay, the fixed charges on cruise ships will be equal to the Berth Hire Charges payable as per SOR (Schedule of Rates) (with 40 per cent discount as applicable for cruise ships).
3) Further, cruise ships making:
a) 1-50 calls per year to get 10 per cent rebate.
b) 51-100 calls per year to get 20 per cent rebate.
c) Above 100 calls per year to get 30 per cent rebate.
Thanks to the policy support by the Shipping Ministry since 2014, there has been an increase in the number of calls made by cruise ships in India from 128 (2015-16) to 593 (2019-20).
With a massive coastline and unexplored territories, India’s potential for cruise tourism is enormous. The cruise tourism is perfectly poised to cater to these requirements. Such an initiative will re-ignite the economy as it will spur demand and kick-start the local economy.
