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Duty-free shopping at Indian airports may turn cheaper

business Updated: Aug 10, 2013 02:03 IST
Manoj Gairola
Manoj Gairola
Hindustan Times
duty-free shops

You may soon get to browse for goodies at much larger duty-free shops at Indian airports, if the government accepts a proposal by the Indian electronics and mobile phones industry.

The department of electronics and information technologies is agreeable to the proposal, and wants consent from the ministries of civil aviation, finance and tourism.

The proposal envisages the setting up of large-format duty-free shops in departure halls of international airports to sell goods manufactured in India. The target buyer would be international passengers arriving in India, and departing passengers. Value added tax (VAT), Octroi and other local taxes would not be charged on goods sold in these shops.

This would make branded electronic goods at these shops cheaper than those available at foreign trading centres such as Singapore, Dubai and Bangkok. At present, these duties make electronic goods 25% more expensive, and mobile phones up to 23%.

The government recently took the first step in this direction by issuing a notification doing away with excise duty on indigenous goods sold in duty free shops.

Indian airports do have duty-free shops, but these are small, and tourists usually prefer to shop at duty-free outlets abroad than in India, especially for electronic goods.

"We estimate that these measures will create an industry reaching a turnover of

Rs 25-30,000 crore within two years and employing more than 100,000 people," said Pankaj Mohindroo, national president of the Indian Cellular Association.

The association recently met union IT minister Kapil Sibal, and got a positive response.