Under pressure to rein in rampant inflation, the UPA government slashed import duty late on Monday on cement, machinery, and a variety of raw materials and metals.
The move, which comes some 36 days ahead of the budget, aims to reduce the cost of manufacturing. In recent weeks, manufactured items as a group have shown price increases contributing to the overall inflation rate, which climbed to 6.12 per cent for the week ended January 6, the highest in two years. Economists have seen a cost-push factor for prices of manufactured items moving up.
The government said the cut in customs duty, which comes into effect immediately, will bring down manufacturing costs and aid the development of infrastructure.
The government was expected to cut customs duty in the budget, but the process has been hastened as an urgent measure to fight inflation. Other anti-inflationary steps are in the offing.
Portland cement: From 12.5% to zero Specified capital goods and parts, and winding wires: From 12.5/10% to 7.5% Project imports: From 12.5/10% to 7.5%
Inorganic chemicals like halogens, sulphur, carbon, hydrogen, rare gases and alkali metals: From 10% to 5% Carbon Black feedstock: From 10 to 5%
Primary and semi-finished forms of copper, aluminium, zinc, tin, other base metals: From 7.5% to 5%
Ferro-alloys, stainless steel, and other alloy steel: From 7.5% to 5%
Pipes and tubes of aluminium, copper, and zinc: From 12.5% to 7.5%
Calcined alumina: From 7.5% to 5% Refractories: From 7.5% to 5%
Specified raw materials of refractories: From 10/7.5% to 5%
Project import rate of 7.5% is extended to airport and metro rail projects