The government is considering several measures to limit any sudden widening of the country’s current account deficit (CAD), Union Commerce Minister Piyush Goyal said on Thursday.
The minister said that various government departments were coordinating with each other to control the impact of the challenging trade situation due to the ongoing conflict in West Asia.
The government has taken several measures in response to the war-induced fiscal challenges facing the country. Import taxes on precious metals such as gold and silver have been raised to limit the depletion of foreign reserves.
Also, the Emergency Credit Line Guarantee Scheme 2.0 has been launched by the government in order to shield sectors most affected by the Iran war.
Amid the weakening rupee, the Reserve Bank of India has taken various measures to control the slide in the domestic currency.
Policymakers are working on additional measures to manage external risks and maintain macroeconomic stability, Goyal said while addressing the AMCHAM Annual Leadership Summit in New Delhi on Thursday.
He highlighted the strength of the domestic economy and said that India’s GDP had been upgraded from 6.4 percent to 6.5 percent amid the global crisis, demonstrating the capability of 1.4 billion Indians.
He said that this achievement reflects the country’s growing ability to engage with the world from a position of strength and confidence.
Crude oil prices have jumped more than 60 percent since the start of the war in West Asia in late February.
Global oil benchmark Brent Crude was around $65 per barrel before the conflict. It has now surged to $105 per barrel.
Crude oil is the biggest contributor to India’s import bill, while gold imports are the second-largest contributor.
India’s current account deficit stood at $13.2 billion, or 1.3 percent of GDP, during the December quarter. It was higher than the $11.3 billion reported in the corresponding period a year earlier.
