NEW DELHI/MUMBAI: With the Indian rupee facing sustained pressure against the US dollar and external economic risks mounting, Union Commerce and Industry Minister Piyush Goyal on Thursday said the Centre is actively evaluating multiple policy options to prevent the country’s Current Account Deficit from widening further.
Addressing reporters, Goyal said various ministries and government agencies are closely coordinating to monitor the evolving global economic environment and assess suitable interventions to maintain macroeconomic stability.
He noted that although international conditions remain difficult due to geopolitical tensions and volatile commodity prices, India remains confident of navigating the situation effectively through coordinated policy action and economic resilience.
The minister clarified that the government is not considering restrictions on non-essential imports at present. However, he stressed the importance of responsible consumption and urged citizens to be mindful of products that heavily rely on imports and place additional pressure on foreign exchange reserves.
The remarks come days after Prime Minister Narendra Modi appealed to people to postpone discretionary gold purchases and avoid expensive overseas destination weddings in an effort to reduce unnecessary outflow of foreign currency.
India’s import bill for precious metals has witnessed a sharp increase over the past financial year. Gold imports climbed 24 per cent to a record $72 billion despite a decline in overall import volumes to 721 tonnes. Silver imports registered an even steeper rise, surging nearly 150 per cent to around $12 billion, while shipment volumes increased significantly.
In response to the spike in precious metal imports, the government recently raised import duties from 6 per cent to 15 per cent in an attempt to moderate demand and reduce pressure on the trade balance.
Economists have also warned that India’s external sector may face additional strain due to rising crude oil prices linked to tensions in West Asia. According to a recent assessment by Crisil, the country’s Current Account Deficit could expand to 2.2 per cent of GDP during the current fiscal year, compared with an estimated 0.8 per cent in the previous year.
Analysts pointed out that the combined impact of higher energy imports, elevated gold prices and reduced foreign portfolio investment has intensified downward pressure on the rupee. The Indian currency briefly approached the 97-mark against the US dollar earlier this week, reflecting concerns over external vulnerabilities.
On Thursday, however, the rupee recovered partially and closed at 96.20 against the dollar, gaining 62 paise amid intervention by the Reserve Bank of India and easing crude oil prices.
Currency market dealers said the rupee opened stronger and extended gains due to aggressive dollar selling by public sector banks acting on behalf of the central bank. Market experts believe the rebound remains temporary and largely influenced by softer crude prices and profit-booking in the forex market rather than any long-term structural improvement.
Jateen Trivedi, research analyst at LKP Securities, said lower crude prices may continue to provide short-term relief to the domestic currency, although broader global uncertainties still pose risks to the rupee’s stability.
Economists from DBS Bank also observed that the recent energy shock has disrupted macroeconomic stability and added pressure on India’s external balances. However, they maintained that India is in a relatively stronger position compared with earlier global crises due to improved foreign exchange reserves and better current account management.
A weaker rupee raises the cost of imports, especially crude oil, which can increase domestic inflation and impact household expenses as well as industrial input costs. Policymakers are therefore expected to focus on maintaining external stability while balancing economic growth and inflation management in the coming months.