India: Minimum import price among options to curb non-essential goods

  • India could look at imposing minimum import prices or safeguard duties on some goods as it attempts to cut nonessential imports and compress the current account deficit to halt rupee depreciation.
  • These measures are seen to be more effective than simply raising duties, which leads to goods being routed via countries with which India has free trade agreements (FTAs), or outright bans that run afoul of the World Trade Organisation (WTO).
  • Restricting entry of some goods to certain ports and selective duty increases could also be considered.
  • Commodities that could come under such curbs include some nonferrous metals such as copper and aluminium, precious metals including gold and telecom equipment besides some categories of consumer durables.
  • A section of the government is in favour of such steps as these cover FTAs as well, unlike increases in domestic import tariffs. There are instances of imports taking the FTA route after domestic duties were raised.

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