India bans cement exports, restriction on steel likely

India has banned export of cement from Friday and was considering a similar move for steel, the trade minister confirmed on Saturday, as the government aims to calm inflation that leaped to a three year high level.
"We have issued a notification last night banning export of cement," Kamal Nath told reporters after a business conference.
India's cabinet ministers, scheduled to meet next week, will also debate on a proposal to ban steel exports, he said.
Nath had already said on Friday that the government would ban cement exports and also withdraw export incentives for steel and cement products.
India's headline inflation raced to an annual 7.41 percent in late March, its highest since November 2004, due to higher prices of food and metals, government data showed on Friday.
Over the last few weeks, the government has cut duties on edible oils, banned export of non-basmati rice and withdrew export incentives for cement and steel to increase local supplies and tame inflation.
Policymakers also contemplate an upward pressure on cement prices, as demand outpaces supply in Asia's third largest economy that is scaling up its creaky infrastructure at a cost of $500 billion to sustain an average annual growth of 9 percent until 2012.
"India is growing by 8-9 percent. I largely see this momentum continuing," Nath said.

IMPORTS TO HELP
Trade Secretary, G.K. Pillai said the country was aiming at doubling cement imports from neighbouring Pakistan to 4,000 tonnes a day, and the latest ban on exports could help meet the demand-supply gap.
"When there is a shortage, why allow exports? We are going to double imports from May."
India allowed duty-free import of cement from Pakistan in 2007, as domestic firms like Grasim Industries Ltd, UltraTech Cement, ACC Ltd. and Ambuja Cements Ltd are running almost at near full capacity and can not match the growing demand in near future.
Indian firms plan to add another 100 million tonnes in capacity by 2010 at a cost of 400 billion rupees. "This would ease the pressure on prices," Pillai added.
India's cement output grew by 7.5 percent from a year earlier to 151.24 million tonnes during April-February in the 2007/08, of which exports were at 3.33 million tonnes, according to industry body Cement Association of India.