The sharp depreciation of the rupee against the US dollar over the last four weeks has neutralised the impact of recent import duty cuts aimed at lowering prices of commodities like edible oil, metallurgical coke and newsprint.

The cost of imported newsprint, for instance, has increased by almost 9 per cent in the last one month despite a reduction in excise duty to 3 per cent from 5 per cent. India meets about half its newsprint requirement through imports.

Crude palm oil (CPO), becoming cheaper in dollar terms, is now marginally costlier in rupee terms. This despite a cut in duty from 45 per cent to nil in March. The country meets 45 per cent of its edible oil requirement through imports.

The rupee has weakened 6.55 per cent against the dollar to Rs 42.60 since April 20. The Reserve Bank of India [Get Quote], which was on a dollar-buying spree for long to check the appreciation of the rupee, sold about $1.5 billion in March.

Finance Minister P Chidambaram had on April 29 announced scrapping of the 5 per cent duty on metallurgical coke, ferrous alloys and zinc, all of which are used to manufacture steel. Also, the duty on steel products was scrapped and house construction products like TMT bars and structurals were exempted from the 14 per cent countervailing duty.

"Most gains arising out of the duty cut has been taken away by the rupee factor. At the same time, we are not in a position to cash in on the higher returns from exports since an export duty has been levied on steel," said an official with a steel company.

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