By Shruti Srivastava and Siddhartha Singh
India is considering a proposal to increase import duties on a raft of products ranging from plastic to steel as it seeks to curb a ballooning current-account deficit and prop up a sagging rupee, people familiar with the matter said.
Prime Minister Narendra Modis administration is planning to increase tariff on items including furniture, chemicals and mobile phone components, the people said, asking not to be named as the information is not public. The prime ministers office is planning a meeting in New Delhi as early as this week to review measures including curbs to curtail the trade gap, they said. Finance ministry spokesman D.S. Malik declined to comment.
The South Asian nation is trying to curb overseas shipments to prevent a further widening of the current-account deficit and stem the fall of the rupee. The currency, which has been plummeting for six straight months in the longest stretch since 2002, is seen hitting 75 per dollar by year-end, according to median of 10 analysts surveyed by Bloomberg.
The trade deficit represented 2.4 percent of gross domestic product, more than the 1.9 percent seen in the March quarter, according to latest data from the RBI. Earlier measures such as raising import tariffs on 19 products and easing some overseas borrowing norms have as yet failed to revive the confidence of investors.