Indian Govt hikes custom duty on 19 items to curb current account deficit

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Indian Government announced a hike in customs duty on 19 items to curb “non-essential imports” and narrow the current account deficit.

The Finance Ministry said, “The central government has taken tariff measures, by way of increase in the basic customs duty, to curb import of certain imported items. These changes aim at narrowing the current account deficit (CAD) … In all the customs duty has been increased on 19 items.”

The move follows an announcement to this effect by Finance Minister Arun Jaitley earlier this month after a meeting with Prime Minister Narendra Modi in the wake of fall of Indian rupee against dollar.

The import duty is raised on 19 items, such as aviation turbine fuel (ATF), consumer appliances such as television, refrigerator, air conditioner and speakers, washing machines, footwear, jewellery, furniture fittings, radial car tyres etc.

The total value of imports of these items stood at Rs. 86,000 crore in last fiscal, the Ministry of Finance noted.

Official statement reveals that the import duty was doubled to 20 per cent on ACs, refrigerators, and washing machines of less than 10 kilograms.

This revision in the rates of basic customs duty will be effective from midnight of September 26-27.