Even as the government plans measures to bail out exporters hit by the rising rupee, the concern is now spreading inwards as well. The government is beginning to get worried that the stronger currency may affect parts of the domestic industry.
Sources said while it is still to take specific measures in this regard, the government may look at raising customs duty rates for some sectors at least. This would, however, be done after a clear impact of the stronger rupee on imports is studied, they added.
While such a move would not completely be in step with India?s plan of lowering customs duty rates to Asean levels, the decision may have to be taken as otherwise it may affect growth of domestic industries.
?Just as the exporters are asking for relief measures, importers too may ask for a similar package in some time,? a government official pointed out, adding that helping out one would mean that the other groups would also have to be provided relief.
The measures are being planned as the government is worried that a stronger rupee is leading to cheaper imports flooding Indian shores and hurting markets mostly reserved for domestic industries. Their plans for future capacity expansion too would be affected.
The rupee has risen by nearly 15% and has already hit exports severely. Exporters have been given three relief packages amounting to Rs 5,200 crore so far and talks are on between the finance and commerce ministries for another round of measures.
While the trade data till September shows a decline in imports, government officials say a one month trend is not enough to definitely say that domestic industries are not getting hit.