The Centre's decision to curb imports as a measure to shore up rupee and cut CAD has come in for criticism from India's premier exporters body Federation of Indian Exporters Organisation (FIEO).
The organisation said the decision is akin to joining the “protectionist bandwagon”
“I don't think CAD at 2.5% of GDP should be cause of concern as anything below 3% is not alarming. Moreover, we have sizeable forex reserves to cover 10 months of imports. Greater worry is trade deficit and rupee depreciation. However, I do not think we should restrict imports to address them unless we want to join the bandwagon of protectionism and hope it will promote “Make in India,” Ganesh Gupta, FIEO president, told DH a day after the decision.
The Centre on Friday took a policy decision to stop all “non-essential” imports. The list of items on which import curbs were required would be drawn by the relevant ministries.
Gupta hoped that the import curbs would only be imposed on high-end electronics, watches, gold, high-end apparels and footwear.
He said the government should ease liquidity to exports sectors by encouraging banks and refund agencies to help exports.
He also favoured issuance of short and long term NRI bonds to check rupee depreciation.
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