India's Cruise Industry Is Doing Even Better Than Pre-Pandemic Days: Here's All About It

The tides are turning for Indian cruises. What was once a high-end experience is becoming increasingly affordable, attracting a wider demographic and shaking off its elitist image.

This shift is reflected in recent figures — cruise tourism in India has hit a new high with footfall reaching 4.7 lakh in 2023-24, exceeding pre-pandemic levels. Government data reveals a surge in domestic tourists, their share increasing by nearly 85 per cent compared to 2019-20. International tourist footfall also increased more than threefold in 2023-24 compared to 2022-23.

The cruise industry supports an impressive 1.2 million jobs and contributes a staggering $150 billion to the global economy annually.

The number of cruise ships plying in Indian waters is set to soar from 208 in 2023 to 500 by 2030 and further escalate to 1,100 by 2047. Concurrently, the influx of passengers utilising these cruise services is expected to witness a significant surge, projected to rise from 950,000 in 2030 to a staggering 4.5 million by 2047, as per government projections.

What are the factors driving the surge?

India boasts a massive coastline exceeding 7,500 km and a network of inland waterways stretching over 14,500 km. This unique geography positions India as a natural hub for cruise tourism, offering both coastal and river adventures.

Further, India's peninsular shape juts out into the Indian Ocean, creating a prime location for international cruise itineraries. This strategic location, coupled with India's existing popularity as a tourist destination, is attracting major cruise lines.

Further, the rise of domestic cruise tourism in India can be attributed to a confluence of factors, including escalating demand, increasing disposable incomes, government initiatives, and industry developments.

Modern cruise terminals: Cities like Chennai, Visakhapatnam, and Mumbai are operating modern international cruise terminals, enhancing the overall cruise experience.

For instance, Visakhapatnam International Cruise Terminal (VICT) welcomed world's largest privately owned residential mega yacht on Sunday (28 April) which marks a significant milestone in India's commitment to becoming a premier destination for international cruise liners.

River cruise options: Domestic operators are introducing river cruises, with the "Ganga Vilas" being the longest ever launched in India. This caters to a new segment interested in exploring India's waterways.

Increased travel demand post-pandemic: With pandemic restrictions easing, there's a strong desire for travel experiences. Cruises offer a unique all-inclusive vacation option that appeals to many.

Growing interest from international players: Established cruise lines like Royal Caribbean and Costa Cruises are already offering cruises with Indian stops and even starting India-specific itineraries. This signifies the potential they see in the Indian market.

Supportive government policies

The Indian government has shown strong commitment to the industry through initiatives like:

Rs 45,000 Crore Investment: This significant investment is specifically focused on developing river cruise tourism.

E-visa facilities: Streamlining the visa process makes travel to India more convenient for international tourists.

Reduced Port Fees: Lower port fees incentivise cruise operators to include Indian destinations in their itineraries.

Priority Berthing: Cruise ships are given priority berthing rights, ensuring smoother operations.

Relaxed Cabotage Restrictions: Cabotage restrictions, which typically limit domestic routes to domestic vessels, have been eased for foreign cruise lines.

Additional Measures: The government is working on addressing GST (Goods and Services Tax) and customs duty concerns raised by the cruise industry stakeholders. Special discounts on port tariffs for domestic cruise ships further incentivise domestic operators, as per Ministry of Shipping report.

Challenges plaguing India's cruise industry

India struggles to harness its potential due to a myriad of challenges. At the forefront of these challenges is the infrastructure deficit.

Unlike Europe, which boasts a dominant share of river cruise vessels, India's cruise infrastructure remains underdeveloped. The absence of adequate ports with cruise terminals for large ships, and facilities for smaller vessels and yachts operating in shallower waters, hamper the industry's expansion.

Furthermore, India's current Goods and Services Tax (GST) rate and structure pose significant obstacles to the growth of its cruise tourism sector. Compared to international standards, the existing tax regime may deter potential investors and limit the industry's competitiveness on the global stage.

Environmental concerns also cast a shadow over India's cruise tourism ambitions. The industry's historical association with carbon-intensive vessels and substantial waste production, including trash, sewage, and grey water, raises alarms about potential port over-tourism and environmental degradation.

Looking ahead

Instead of developing the ports merely as cruise terminals, the government should consider developing these as ‘port destinations.’

Streamlining cruise tourism operations requires better collaboration between central and state government agencies. A national coordinating body could be established to address these issues and propel India's cruise tourism forward.

By implementing these measures, India can position itself to capitalise on the anticipated surge in cruise traffic. The future of Indian cruise tourism is bright, and with strategic action, India can become a leading player in this dynamic and exciting global market.