India proposed duty-free market solution 

India continues to be the fastest-growing duty-free market worldwide

duty-free market

India proposed duty-free market solution. Source:

According to GlobalData, India’s Commerce and Industry Ministry proposed to put limits on duty-free alcohol and cigarettes sales to inbound travelers. This way, they would be able to buy 1 bottle or 1 liter of alcohol, compared to the current 2 bottles or 2 liters, while cigarettes would be slashed completely.

The ministry aims to reduce the value of goods and gifts a passenger can get into the country without paying import duty, which is currently capped at $712.6 as well.

The proposed changes are a part of the government’s plan to limit the import of non-essential goods into India.

India’s duty-free sales increased at a compound annual growth rate (CAGR) of 23.1% during 2013-2018 to reach $1 billion in 2018. It is expected to grow at a CAGR of 19.2% to reach $2.5 million in 3 years.

The proposed changes, if implemented, will negatively impact the duty-free market in India as alcoholic beverages and cigarettes account for a significant share of total duty-free sales. Drinks is the largest product category sold in the Indian duty-free market with category sales at $695.7 million in 2018, accounting for 66.8% of overall duty-free sales. However, the proposed slashing of the limit on alcoholic drinks to half is forecast to reduce the category sales by nearly 25%
Vijay Bhupathiraju, Retail Analyst at GlobalData


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