In a bid to check inflationary pressures the government on Monday cut customs duty on cement, various raw materials and capital goods. The duty structure comes into effect immediately.

A government statement said this was in an attempt to reduce the cost of manufacturing and infrastructure development.

Last week the inflation rate hit a two-year-high of 6.12 per cent, prompting concern from finance minister P Chidambaram.

The government and the Reserve bank of India have earlier taken a slew of measures to cool inflation and analysts expect the RBI at its quarterly monetary policy review on 31 January to further tighten credit by raising bank rates to curb inflation.

Customs duties were cut on portland cement to zero from 12.5 per cent; ferro-alloys stainless steel and other alloy steel to 5 per cent from 7.5 per cent; calcined alumina to 5 per cent from 7.5 per cent; aluminium, copper and zinc pipes and tubes to 7.5 per cent from 12.5 per cent. Customs duty on primary and semi-finished forms of copper, aluminium, zinc, tin, other base metals was reduced to 5 per cent from 7.5 per cent.

The government also reduced the customs duty on inorganic chemicals like halogens (fluorine, chlorine, bromine, iodine), sulphur, carbon, hydrogen, rare gases and alkali metals to 5 per cent from 10 per cent.

Customs duty on carbon black feed stock was reduced to 5 per cent from 10 per cent, and refractories to 5 per cent from 7.5 per cent, and specified raw materials of refractories to 5 per cent from 10.75 per cent.

Duties on project imports have been reduced to 7.5 per cent from 12.5 per cent; specified capital goods and their parts to 7.5 per cent from 12.5 per cent. The project import rate of 7.5 per cent has been extended to airport development and metro rail projects.