CAD will be contained at $60bn despite US tapering: Chidambaram

India's finance minister P Chidambaram on Tuesday expressed confidence that India's current account deficit (CAD) would be contained below $60 billion this financial year, lower than an earlier government estimate of $70 billion.

"We think we can peg CAD at $60 billion or below. I am confident that we can do even slightly better than $60 billion," he said in a TV interaction.

India's trade deficit or CAD had touched an all-time high of $88.2 billion - 4.8 per cent of the GDP - in the last fiscal ended March. The deficit for the April-June quarter was $21.8 billion, 4.9 per cent of GDP.

High gold import was a major cause for pushing up the CAD to a record high. Curbs put in by both the Reserve Bank of India and the union government have helped contain gold imports this fiscal.

On impact of the US Federal Reserve's gradual stimulus withdrawal, Chidambaram said the tapering will happen, but both the markets as well as the government are prepared to deal with it.

"We now know it will happen ... perhaps in January or February, today they say it will happen in March. The market and government are prepared for this, in the sense that we know it will happen. Therefore, we need to strengthen the fundamentals of the economy, what the (RBI) governor said bullet proof balance sheet, which means we will contain CAD, we will contain fiscal deficit, improve the revenues, contain expenditure, take steps to prevent excessive speculations on the currency," the finance minister said.

Chidambaram further said number of measures are being taken to ensure that when the US tapering happens, "markets won't be taken by surprise, we won't be taken by surprise and whatever impact it will be a minimal impact".