India mulls raising import duty on steel to support rupee

The rupee has depreciated more than 12 per cent since the beginning of the year.

With rupee slumping to all time low, steel ministry has proposed duty hike on import of some steel products to 15 per cent, said a Reuters report quoting two sources.
 
The current import rates range from 5 per cent to 12.5 per cent, according to two sources and a government document reviewed by Reuters. The ministry is of the view that hike in import duty will help curtail rupee fall.
 
The proposal is set to be discussed by the commerce ministry on Wednesday, one source with knowledge of the matter told Reuters. 
 
There are also plans to cut “non-necessary” imports to stop an outflow of dollars that has sent the rupee to record lows. 
 
“The broader message is to address the trade balance but we will try to promote ‘Make in India’ by encouraging domestic (steel) production,” the source was quoted as saying.
 
The rupee has depreciated more than 12 per cent since the beginning of the year. Finance Minister Arun Jaitley had last week said that the government will take necessary steps to cut down non-essential imports including gold, mobile phones, electronics, etc.
 
The government is also considering containing import of gold as it is the second highest commodity imported into the country, after crude oil. It might also look to hike customs duty on the yellow metal, if import is not contained.
 
There are reports of curtailing imports of mobile phones, electronics, and some other items.
 
Source: Reuters & media reports

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