India should accelerate the pace of reduction of customs duty rather than merely carry on building up the foreign exchange reserves which is at a comfortable level, according to Montek Singh Ahluwalia, former finance secretary and one of the authors of India's economic reforms.

"India's duties are one of the highest in the world and on an average three times that of China," Ahluwalia said, adding that the idea that exports are always good and imports bad was not correct.

"The Indian economy is bouncing and that is a feel good factor but India should reduce customs duties so as to increase imports and investments from abroad. That is an area where we need more action," he told PTI on the sidelines of the World Bank annual meeting in Dubai.

Ahluwalia who is currently director, Independent Evaluation Office of the IMF, said though the Indian economy was doing well, the perception from abroad was that India was not performing upto its potential and could do better.

"China is growing at the rate of 8 per cent and India had also targeted 8 per cent, there is no reason why we could not achieve that if we put policies in place," he said, adding that India's performance was however better than other developing countries.

He said the appreciation of rupee was not a reason for much concern as made out by the exporters and felt the recent Supreme Court verdict regarding privatisation of oil firms will not have any long term impact on reforms.

He lauded the stand taken by India and other developing countries at Cancun, saying there was an awareness and acceptance in the west of concerns expressed by the developing countries at Cancun.