Zurich Airport, the developer of the second international airport of Delhi-NCR region, has lent support to its peers in India in opposing the proposed restrictions on duty-free sale of liquor and cigarettes.
“Zurich Airport is aware of the newly published regulation, we are currently analyzing it," the airport said in a response to a query sent by
All stakeholders in the Indian aviation system have been confused and worried since January 19 after it was
reported that a proposal by commerce ministry has been made to restrict the purchase of tax-free alcohol to 1 litre from 2 litre and prohibit the purchase of a carton of cigarettes comprising 100 sticks at duty-free shops. The proposal is believed to be currently being assessed by the finance ministry.
While Zurich Airport did not elaborate further on the matter, it said that it supports the
statements made by India’s private airports body Association of Private Airport Operators and the global airports body Airports Council International.
The statement from Zurich Airport, which is set to build Jewar airport at an estimated cost of Rs 30,000 crore, comes at a time when domestic and overseas airport bodies have warned of the impact of restrictions on private investment in Indian airports.
Airports across the world have warned of "disastrous" impact of the move on private investment in Indian airports and Airports Council International has requested rejection of the proposal by concerned authorities.
“Notably, the amendment in question is inconsistent with the latest attempts by the government to incentivise private capital to invest in the airport sector. The aggressive and successful bids of the latest airport privatisation processes and the investors’ risk to cover significant capital expenditure plans require them to diversify and increase non-aeronautical revenue streams to ensure the viability of a project,“ Airports Council International said in its letter to the aviation minister Hardeep Singh Puri.
The association of private airport operators had also made a similar appeal, adding that this may lead to a scenario where the new operators like Adani Group and Zurich Airport may find airports unviable and may even “renege on their contracts.”
In November 2019, Zurich Airport had emerged as the highest bidder to develop and build the Jewar airport at a cost of Rs 30,000 crore with an aggressive bid of Rs 400.97 per passenger. Zurich Airport surpassed the bids submitted by Adani Group and GMR to win the construction award. While Adani group had submitted a bid of Rs 360 per passenger, Delhi International Airport had submitted a bid of Rs 351. The airport has been awarded for a concession period of 40 years.
At most Indian airports duty-free revenues make up 15-20 percent of the total non-aeronautical revenues and sales of liquor and cigarettes together account for over 75-80 percent of overall duty-free sales, data from domestic airports shows.Data from global airports shows that while duty-free and travel retail has seen a high pace of growth in India over the 2007-2017 period (up 21 percent per year), India’s current duty-free and travel retail market is relatively nascent.