List of 'non-essential' imports to be finalised by the end of this week

Gold, finished steel, electronics and food items, such as fruits and almonds, among others, may figure in a comprehensive list of 'non-essential' imports, to be finalised by the end of the week. The items had been suggested in a meeting called by the Department of Economic Affairs on Monday to rein in the widening current account deficit (CAD), which was attended by senior officials from all economic ministries, according to senior sources.

Almost 10 months after the mid-term trade policy was updated to prioritise the reduction of India’s ballooning trade deficit and improve exports, the government has swung into action as the rupee has remained in a free fall and high global crude prices have pushed petrol and diesel to be retailed at near record levels across the country.

A high-level meeting chaired by Prime Minister Narendra Modi on Friday had also announced a five-pronged measure to increase dollar inflows into the country to the tune of an estimated $10 billion while reducing the CAD. The CAD had risen to 2.4 per cent of the country's gross domestic product (GDP) in the first quarter of 2018-19 from 1.9 per cent in the fourth quarter of 2017-18.

On the other hand, trade deficit reached a whopping $465.58 billion in 2017-18, up by more than 21 per cent. Of this, gold imports formed the second biggest chunk of the import bill just after crude oil and may see a hike in import duty, according to sources. 

The NITI Aayog has suggested that the government bring down the existing import duty of 10 per cent in gold as well as reduce GST rates. However, voices within the government have argued this might increase the risk of smuggling.

Imports surge in various categories

India's $ 87 billion oil import bill shot up by more than 23 per cent in 2017-18 and is expected to rise further as prices harden. New Delhi expects oil prices to move up post-November when most of the consignments from Iran stop due to a decision to import more from other middle eastern nations as the United States pile up sanctions on Tehran.

Despite multiple tariff hikes, the last of which was announced in the latest national budget, electronic imports — mostly in the form of high-end mobile phones and LCD television - have continued to surge over the past few years.

Tariffs on 29 US imports deferred by 45 days

Higher import duties on 29 key US products, set to go live from September 18 onwards, has been deferred again, this time by 45 days. From Tuesday onwards, imports of high value products, such as apples, almonds and walnuts from the US were set to attract 50 per cent higher tax. Despite both sides having had three meetings over the past three months on the issue, possible solution is yet to be found. BS Reporter