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Tuesday, October 3, 2023

Reducing Duty-Free Alcohol & Cigarette Allowance will Adversely Affect Local Airport Economy: ACI


New Delhi: If the Government of India accepts the proposal made by the Ministry of Commerce and Industry, the Duty-Free allowance to purchase alcohol from Indian Airports will be restricted to One 1-Liter bottle which at present is for Two 1 Litre Bottles.

Airports Council International (ACI) Asia-Pacific has called upon the Government of India to maintain the status quo of the existing per passenger duty-free liquor allowance

“We urge the authorities to reject this proposal. Not only is it inconsistent with the latest attempts by the Government to incentivize private capital to invest in the airport industry but it undermines the growth opportunity for Indian airports and duty-free providers who are a driving force in the local airport economy,” said Mr. Stefano Baronci, Director General, ACI Asia-Pacific. “Duty-free operators must be able to count on the expansion of airport infrastructure along with new retail space and a regulatory framework that incentivizes the market to grow. Unfortunately, the Ministry’s proposal will limit this objective if airports cannot generate non-aeronautical revenues to cover the aeronautical cost.”

The privatisation process of Indian airports that heavily relies on revenue generation from non-aeronautical sources of business is bound to take a hit if the proposals are accepted. Duty-free shopping of alcohol and cigarettes is a big hit among Indians due to the price disparity between domestic market and duty-free shops which is among the highest in the world.

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