India Raised Import Tariffs on Plastics and Refrigerator
2018-09-30    [Source:PUdaily]

In order to narrow the widening current account deficit and relieve the depreciation pressure on rupee, the Indian government has begun to restrict the import of nonessential goods.

At the midnight of September 26 (Wednesday), India's new import tariffs took effect. Import tariffs on 19 goods were increased including gems, jet fuels, plastics, household appliances and shoes.

Specifically, tariff on jet fuels was raised from 0% to 5%, which had certain impact on airlines. Tariff on diamonds and other gems used in jewelry was raised from 5% to 7.5%. And that on air conditioners, refrigerators and small washing machine doubled from 10% to 20%, which will inevitably make them more expensive.

Besides, tires, loudspeakers, shoes, suitcases, travel bags, and some plastic tableware and kitchenware all will face higher tariffs.

Reuters believed that the move would affect the exports to India of countries such as China and South Korea. And it would take a toll on manufacturers including the South Korean electronics giant Samsung Electronics, LG Electronics, Nike, suitcase producer Samsonite and audio equipment manufacturer Bose Corp.

The Financial Times noted that the move made India another country turning to trade protectionism while seeking to boost its domestic economy.

Recently, emerging markets as a whole were sluggish. Due to significant capital outflow, the depreciation of rupee accelerated.

This week, the Indian rupee fell to a record low of 72.93 per US dollar. This month, the rupee has depreciated by more than 2.5%. So far this year, it has fallen by nearly 15%, making it the worst-performing Asian currency.

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