In the wake of rupee's continuous devaluation, government in the past week has worked out some 5 measures to support the rupee and rein in the underlying CAD. And in this direction, steel ministry of India as per sources is considering to increase effective import duty on some of the steel items from the current rates in the range of 5.0%-12.5% to 15%.
"The broader message is to address the trade balance but we will try to promote 'Make in India' by encouraging domestic (steel) production", a source is quoted as saying in a Reuters report.
This step is part of the broader initiative of the government to bring down the level of 'non-necessary' imports and hence curb the dollar outflow from the country, which has sent the Indian currency to new record-lows. On Tuesday, rupee closed at a new historic low of 72.97 per dollar but gained strength in Wednesday's session tracking positive cues. The currency was last trading higher by 0.25% or 18 paise at 72.78 against the dollar.
Also, as per sources the discussion on the proposal will be made in the trade ministry today and it is not certain that the proposed duty will be levied.
In the three months ended June, India for the first time in two years became the net importer of steel with supplies amounting higher by 15% at 2.1 million tones in comparison to the previous year.
To further aid in the curbing of ballooning current account deficit, India is also working out ways to reduce gold and other electronic items imports.