To help thermal power industries facing high coal prices, the budget proposes full exemption of basic customs duty and concessional countervailing duty of one percent to steam coal for two years. Full exemption is also provided to fuels for power generation in the cases of plants using natural gas, liquefied natural gas, uranium concentrate and other such fuels.

Basic customs duty on machinery and instruments used for surveying in mining areas, reduced to 2.5 per cent and full exemption from basic customs duty to be provided to coal mining projects. To improve safety and better service of railways, customs duty on equipment reduced to 7.5 per cent from 10. Full exemption from import duty given to specified equipment imported for road construction by contractors of government projects extended to those awarded by Metropolitian authorities as well.

Import of tunnel boring machine will be duty free without end use condition. To help the ailing airline sector, basic customs duty on parts of aircraft and testing equipment to be fully exempted from customs duty. A proposal to foreign airlines to participate upto 49 per cent in the equity of Indian firms is under consideration. To boost manufacturing, basic customs duty on plant and machinery for expansion of iron ore pellet plants to be reduced to 2.5 per cent from 7.5 per cent.

In the steel sector, the duty on coating material for electrical steel to be reduced from 7.5 per cent to 5 per cent. In the textile sector the budget proposes to exempt automatic shuttle-less looms from basic customs duty of 5 per cent. Full exemption is also being given to automatic silk reeling and processing machinery.