The government is in talks with the cement industry and expects cement companies to cut prices to control the soaring inflation.

Minister of state for industry Ashwani Kumar, said representatives of the Cement Manufacturers Association (CMA) have responded positively to suggestions of reducing cement prices.

He said the government has asked the industry to hold prices in the interest of all stakeholders. He asked the industry to shun windfall profits. "In the coming days a significant further reduction in prices of cement can be expected," the minister said.

Finance minister Chidambaram, meanwhile, said the government has increased pressure on the cement manufacturers to cut prices.

"We are in the process of persuading the cement industry to roll back prices," Chidambaram told reporters.

Leading producer ACC has already agreed to "hold cement prices over the coming 2-3 months". The company, however, wants an  "open dialogue with the government to explore viable solutions to combat inflationary trends that have disproportionately increased input costs.''

Kolkata-based Shree Cement said it has already reduced prices in Rajasthan, Haryana and Uttar Pradesh by Rs2-5 and in Gujarat by Rs7 per bag of 50 kg in May.

J K Lakshmi Cement said it is also inclined to hold the price line while Barak Valley Cement, which is a dominant supplier in Assam, Tripura and Mizoram, said, ''If others reduce prices, we will also reduce it to stay in the market".

The Cement Manufacturers Association (CMA), however, remained non-committal. ''Prices are determined by the market," CMA president H M Bangur said, adding every company is free to take its own pricing decision.

He also denied the possibility of any rise in prices. "If one company decides not to hold the prices, it would be very difficult for others to raise the rates," he said.

Cement prices are currently ruling between Rs200 and Rs260 per bag with rates being higher in southern and western parts of the country.