In order to provide some relief to ailing rupee, which has lost over 14% in value so far this year, and curb ballooning current account deficit, the Indian government is mulling over a proposal to hike import duty on an array of items including plastic, steel, mobile phone parts, furniture, chemicals etc. On September 26, the government increased import duty on 19 non-essential items including ATF.
As per the leading business daily report, the prime minister's office is deliberating to hold a meeting as early as this week in New Delhi to work out measures to curb a rise in trade deficit. In accordance with the RBI's latest data, trade gap widened to 2.4% of the GDP as against 1.9% reported for the quarter ended March.
Other measures such as relaxation in some overseas borrowing procedures also failed to provide respite to the sagging rupee which in today's session reached a new record low of 74.46 per US dollar, but later recovered due to dollar weakness and decline in crude oil price.
The currency is likely to touch 75 per dollar mark by year-end.