Sep 28, 2018
Trimming current account deficit: Duty hikes to have marginal impact
The government’s move to raise customs duties on 19 products, including consumer goods and aviation turbine fuel (ATF), to trim the current account deficit (CAD) and ease the pressure on the rupee will have only a limited impact, as demand is unlikely to fall meaningfully due to the upcoming festival season, said analysts. As such, at Rs 86,000 crore, imports of these items accounted for only 2.5% of total merchandise imports and 0.5% of nominal GDP in 2017-18. However, the move sends a signal that the country is willing to act to curb “non-essential imports”, they said.