New Delhi: The government should focus primarily on boosting exports to check the widening current account deficit (CAD) as imposing curbs on imports may not have a significant impact, exporters’ body Federation of Indian Export Organisations (FIEO) said on Saturday. FIEO President Ganesh Gupta said the government should not restrict imports to address rising current account deficit (CAD) and fall in rupee. “I do not think that we should restrict imports unless we want to join bandwagon of protectionism and hope that it will spur Make in India,” he told PTI.
He also said that CAD at 2.5% of GDP should not be a cause of concern as anything below 3% is not alarming. “We have sizeable forex reserves to cover 10 months of imports,” he added.
The government Friday (September 14, 2018) announced an array of steps, including removal of withholding tax on Masala bonds, relaxation for foreign portfolio investments, and curbs on non-essential imports, to contain the widening CAD and check the rupee depreciation.
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