British media said that India has increased import tariffs on 19 commodities including gems, aviation fuel, plastics, household appliances and footwear to curb 'non-essential imports', narrowing the growing current account deficit, and easing the rupee exchange rate. pressure.
According to the British "Financial Times" website reported on September 26, the new tariff will take effect at midnight on the 26th, which will make India the latest country to adopt protectionist measures to strengthen the domestic economy.
When the import tax was announced, the Indian Ministry of Finance said that the country imported certain commodities worth about $11.8 billion in the last fiscal year.
According to reports, the government of Indian Prime Minister Narendra Modi decided this month to restrict imports of goods that it considered 'non-essential' to boost confidence in its currency. So far this year, the exchange rate of the rupee against the US dollar has fallen. About 13%.
However, the new tariffs have had an impact on India's financially difficult airlines. In the past, aviation fuel was tax-free, and today it is subject to a 5% tariff.
According to reports, they also increased the tariff on diamonds and other gemstones used to make jewelry from 5% to 7.5%. India's gem and jewellery industry employs about 5 million workers, and the industry's contribution to GDP accounts for about 7%.
According to reports, imported air conditioners, refrigerators and small washing machines will also become more expensive, and the import duties imposed on them will be increased from 10% to 20%. Other goods that will be subject to higher import duties include tires, speakers, shoes, suitcases. And travel bags and a range of plastic products, including cutlery and kitchen supplies.
Indian economists disagree on whether import restrictions are effective.
The recent rapid depreciation of the rupee – coupled with the soaring oil price – is a disturbing development for an economy that relies on imports for about 80% of its energy needs.
According to reports, India’s current account deficit has also caused its currency to be weak. India’s current account deficit was $13 billion in the first quarter of 2018, and the figure expanded to $15.8 billion in the second quarter (equivalent to 2.4% of its GDP). ).
According to the report, New Delhi also vowed to promote exports, although few specific measures were announced. The government also relaxed some restrictions and announced tax cuts aimed at making India more attractive to foreign investment.