To ease the pressure on the rupee and keep the widening Current Account Deficit (CAD) on check, the finance ministry on Tuesday asked ministries to shortlist commodities and goods for import curbs by increasing customs duty, said people familiar with the matter.

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“Import duty hike may be considered on specified commodities for a limited period of time to keep CAD under control,” the sources said.

The move comes in wake of finance minister Arun Jaitley’s announcement on last Friday, where he said that centre would soon announce curbs on import of non-essential items and other steps aimed at incentivising India’s exports to contain India’s CAD.

India’s current account deficit widened to a four-quarter high at 2.4 percent of gross domestic product (GDP) in the April-June period from 1.9 percent in the January-March quarter of 2017-18. The rising trend in oil prices this year has also sparked concerns about India’s ability to finance its widening CAD.

It is expected that the prime minister's office (PMO) and finance ministry will give the final approval by Friday.

The revenue department will finalise the list of goods for an increase in import duty after getting inputs from different ministries, sources privy to the developments told CNBC-TV18, adding that Central Board of Indirect Taxes and Customs (CBIC) is not in favour of import duty hike on coal, steel and gold.

"Hike in import duty on gold to lead to more smuggling and unnecessary imports,” they added.

The government is likely to spare goods and inputs that may adversely impact 'Make in India' and digital India programmes.

“Import duty hike on inputs for cell phones would go against the make in India programme and digital India, said a government official, adding that telecom ministry is not in favour of Increase in import duty on parts for cell phones.

Meanwhile, talking to CNBCTV18, senior government officials said that the final list will be prepared only after considering the impact such curbs will have on the domestic industry.

Finance ministry will consider any suggestion only after assessing that any hike of levies should not impact the growth in domestic manufacturing, industrial output and GDP.

“Any hike of import duty on gold would lead to more smuggling and unnecessary imports. Similarly, hiking duties on coal would have an adverse impact on power plants,” government officials quoted above said on the condition of anonymity.

First Published:Sept 18, 2018 6:24 PM IST