India could become a major destination for foreign cruise operators with the government proposing a simpler tax regime in the Union Budget 2024. Apart from providing a fillip to religious tourism, the budget provides relief to taxpayers who travel overseas. Tax collected at source (TCS) on foreign trips can now be offset against tax deducted at source from salaries according to the new budget announcements. “The presumptive taxation proposed in the budget will attract foreign cruise operators as it offers a more predictable tax regime. The measure would encourage the leasing of cruise ships to related entities, promoting the growth of cruise operations within the country. As a result, the global cruise industry will have an additional cruise destination in India, in addition to the current cruising sectors of the Caribbean, Mediterranean, East Asia, Europe, etc. India will be a promising destination, given its long coastline and multiple tourist attractions, said Rajiv Jalota, Chairperson, Mumbai Port Authority. Data shows that the cruise passenger traffic grew 10 per cent year-on-year in FY 2024. The growth was driven by an increase in foreign ship arrivals last fiscal year. However, the Red Sea crisis which has disrupted global freight trade, is now slowing down the cruise industry too. The budget proposals will give stimulus to the sector. “A simpler tax regime will bring India on the cruising map of the world,” added Nalini Gupta, managing director of Lotus Destinations, general sales agent of Costa Cruises.
Budget proposals on infrastructure development including the construction of new roads and airports will support tourism growth but executives expressed displeasure as their demands for lower GST rate, industry status, and enhanced marketing budgets were left unaddressed. "The government's continued emphasis on infrastructure development is commendable. Enhanced road infrastructure will bolster the travel and tourism sector. We also welcome the initiatives to develop iconic spiritual and cultural sites into world-class tourist hotspots," said Rajesh Magow, co-founder & group CEO of MakeMyTrip. "The decision to reduce the TDS rate on e-commerce operators to 0.1% is a welcome move. Furthermore, the provision of credit for TCS against income tax under 'income from salaries' is logical and will provide much desired relief to taxpayers who travel internationally," he added.
The Central government will be promoting Nalanda including the Nalanda-Rajgir corridor in Bihar as a tourist destination. Finance Minister Nirmala Sitharaman also proposed to support the development of corridors at Vishnupad Temple and Mahabodhi Temple in Gaya, along the lines of the Kashi Vishwanath Temple corridor.
The Central government will also focus on developing tourism in Odisha. Known for its scenic beauty, temples, craftsmanship, and wildlife, Odisha holds great potential as a tourist hotspot, the minister said.