Government hikes import duty of 19 non-essential items to curb import

The Union Finance Ministry has increased import duty on 19 ‘non-essential items’ high-end consumer items to curb import of certain imported items. This decision was taken in effort to stabilise depreciating rupee by narrowing current account deficit (CAD) and get outgoing foreign funds flowing back to India.

Key Facts

CAD is difference between inflow and outflow of foreign exchange. It has widened to 2.4% of GDP in the April-June quarter. The 19 ‘non-essential items’ includes air conditioners, refrigerators, washing machines and ATF (aviation turbine fuel). Total import bill on account of shipment of these items into country in last fiscal (2017-18) was Rs 86,000 crore.


Curbing non-essential imports was part of Central Government’s five-pronged steps to check widening CAD and capital outflows. Other steps included removal of withholding tax on Masala bonds, relaxation for Foreign portfolio investment (FPIs). Rupee has depreciated more than 12% so far this year on widening CAD and higher oil prices.


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