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April 11, 2008 16:33 IST
Fighting surging prices, the government on Friday banned cement exports and withdrew incentives on steel in the new foreign trade policy that provides a host of incentives to meet the targeted $200 billion.
"To curb inflation, the government has banned export of non-basmati rice, edible oil and pulses... We are also withdrawing incentives under promotional scheme on export of cement and primary steel items," Commerce Minister Kamal Nath said unveiling the policy for 2008-09.
The government could also ban steel exports, an option that could be considered at the meeting of the Cabinet Committee on Prices next week, a top ministry official said.
Seeking to address surging inflation and sharp depreciation in the dollar amid economic slowdown, the policy cuts down customs duty in capital goods from five per cent to three per cent, a move aimed at buoying the industry whose growth slowed down to 8.7 per cent during first 11 months of 2007-08 from 11.2 per cent a year-ago.
The policy coincides with the release of government data on prices that put the inflation at 40-month high at 7.41 per cent fuelled by among other things a 5.6 per cent rise in steel prices during the week ended March 29.
"But we have to ensure that inflation does not happen at the cost of exports," Nath said clarifying that domestic availability of goods would get precedence over anything else.
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