Duty cut high on trade plan agenda
R. SURYAMURTHY

New Delhi, April 6: The foreign trade policy, to be announced on Friday, could make the import of food articles, commodities and metals cheaper, both to check inflation and make industry competitive globally by allowing firms access to raw materials at a lower cost.

To check prices, the government has scrapped import duties on edible oils, banned the export of non-basmati rice, cut duties on maize imports to zero from 15 per cent and extended the ban on pulse export by a year. It has also banned the export of edible oils and scrapped the export refund schemes in steel and cement.

With inflation touching a more-than-three-year high of 7 per cent, the government is expected to boost imports and encourage exports of only those value-added products that do not push inflation.

Analysts said inflation in commodities such as rice and pulses was because of a shortage in the supply of rice of up to 4 million tonnes and pulses of up to 2 million tonnes.

Fiscal measures such as reducing customs duties for a short period of time until prices stabilise will help to bridge the gap between demand and supply. There could be a similar move in metals and metal products.