other non-essential items with a view to reduce the import bill and the current account deficit, although trade experts have doubted the efficacy of these measures.
As FE reported earlier, there are also plans to raise duties on more luxury items like imported watches, perfumes, clothing and on imported electronic goods like laptops, refrigerators, music systems.
“Crude imports are an area of concern due to a sharp spurt in the prices of brent crude that puts pressure on the import bill. Another area of concern is the increased imports of electronic goods (India imported more than $32 billion worth electronic goods last year,” Sharma said.
He added that with the international prices of crude oil rising over the past ten days, the import bill may go up in the coming months. The minister also said Russia has lifted a ban on import of non-Basmati rice from India and New Delhi aims to make a significant market in Russia in oil seeds and rice. “45% of our exports have a substantial import component and those imports have become costlier which have offset the gains from rupee depreciation,” he added.
Finance minister P Chidambaram said in Parliament recently: “We are going through a period of stress...we have to take some hard decisions... Some measures to curb import of inessential items will also be announced. All these measures taken together will have beneficial impact.”
Imports of gold and crude oil have fuelled India's trade deficit, which has contributed to the widening current account deficit (CAD). The CAD touched an all-time high of 4.8% of gross domestic product or $88.2 billion in 2012-13. The government aims to bring down the CAD to 3.7% of GDP, or $ 70 billion, in the current fiscal. “Economic stability in major EU economies, including the UK and the economic growth in the US will also lead to higher demand in the coming months,” the minister said.
Exports during April-August increased 3.89 % to $124.46 billion over $119.771 billion in April-August 2012. Imports during the period grew 1.72 % to $197.79 billion compared with $194.44 billion in the same period of the previous fiscal. Trade deficit for April-August 2013-14 declined to $73.36 billion compared with $74.67 billion in April-August 2012-13.
‘India should export iron ore’
Commerce minister Anand Sharma urged for easing the restrictions on exports of iron ore, the exports of which have declined 60% in the last