New Delhi: India is likely to announce on Thursday curbs on imports of “non-essential” items to support the rupee, two government sources said, as Prime Minister Narendra Modi’s administration scrambles to tackle growing concerns over the economy.
A third government source said India may raise import duties on components used in mobile handsets, most of them imported from China, as one of the measures. The federal steel ministry has also proposed increasing duties on some steel products.
The sources declined to be named ahead of an expected public announcement. The Finance Ministry did not immediately respond to an email seeking comment.
The rupee is down about 12% this year, hitting successive lows over the past few weeks amid a widening current account deficit and a selloff in emerging markets.
Indian financial markets are closed on Thursday for a public holiday.
The rupee is Asia’s worst-performing currency this year, and a Reuters poll of 10 market participants showed on Thursday that short bets on the rupee were at a five-year high.
In addition to higher import duties, India is considering asking the central bank to offer dollars directly to oil marketing companies or through a state-run bank to reduce domestic demand for dollars. The government could also look at raising dollars by tapping expatriates to invest in bonds for non-resident Indians.
(Reuters)