India considering steps to control CAD amid Rupee, export pressure: Piyush Goyal
“We are monitoring the situation,” Goyal said. “All the various arms of the government are working as a team. Several stepsare under consideration,” he said, responding to a query on measures the government plans to take to contain the current account deficit (CAD) and rupee depreciation.
The current account deficit widened to $13.2 billion, or 1.3% of gross domestic product (GDP), in the December quarter from $11.3 billion a year ago, amid a wider trade deficit caused by a decline in shipments to the US, India’s largest export market.
Also read: Current account deficit to widen to 2.3 percent of GDP in FY27 from 0.9 percent in FY26: Report
Government ‘monitoring the situation’ to stem rupee’s slide as war winds continue
The rupee has weakened about 7% against the US dollar so far in 2026 and has lost about 6.1% since the war broke out in late February. It closed at 96.3 on Thursday.
Speaking on the sidelines of an event organized by the American Chamber of Commerce, Goyal said, “The situation is quite challenging at the global level, but we have the confidence and courage that we will prevail even in this challenging time.”
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Pressure on Forex Reserves
The government increased the basic customs duty on gold and silver imports from 5% to 10% and the agricultural infrastructure and development tax from 1% to 5%, increasing the total effective import duty to 15% from May 13. Within the scope of the pre-authorization program, exporters were limited to gold imports, while the import of certain types of silver was also restricted.
The aim of the move is to restrict purchases of precious metals from abroad and reduce the pressure on the country’s foreign exchange reserves.
Gold imports increased by 24% in FY26 to reach a record $71.98 billion, but in terms of volume, imports decreased by 4.8% to 721.03 tonnes. In April, silver imports increased by 82% annually, reaching 5.62 billion dollars, due to the impact of high prices.
Prime Minister Narendra Modi has appealed to citizens to avoid buying gold, unnecessary foreign trips and reduce consumption of gasoline and diesel to make the economy resilient to the disruptions caused by the Iran war. “We have appealed to all citizens of India to be more conscious about their spending on import-dependent products,” Goyal said.
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US-India Trade Agreement
The minister said a US team is likely to visit India next month to continue bilateral trade agreement (BTA) negotiations.
Speaking at the event, Goyal said that many major US companies have announced that they will invest in India, as India is a preferred investment destination for the world. “If I look back at the various commitments of American industry over the last six months, that number would probably be over $60 billion,” he said. “Look at the Amazon data center commitments, the Google data center commitments. My feeling is that America and India are really working as natural partners. We complement each other.”
Emphasizing that New Delhi should work closely with Washington in areas such as technology, innovation, high-precision defense, digital data centers, quantum computing equipment and medical devices, Goyal said that India can provide scale to American innovation in terms of demand collection of 1.4 billion Indians, a rising middle class and incomes and a growing economy.
