Mumbai: Tata Iron and Steel Company Ltd (TISCO) will reduce prices of its main products by Rs 2,000 per tonne from midnight tonight (Aug 22, 2004) to arrest inflationary trends, which could dampen the current consumer demand for goods in the country.

"We will reduce the prices for our direct and bonafide customers in the industry and this reduction is expected to contribute in arresting or moderating the pressure on prices by major users of their products," Tata Steel chairman Ratan Tata said in a release in Mumbai today.

Indian steel prices have followed the hike in international rise in prices due to huge demand from China. This hike had a cascading effect on the prices of most domestic products in the engineering, consumer durables and automobile segments, Tata said.

Referring to initiative by other steel makers to cut prices, Tata said, "It is sincerely hoped that other steel manufacturers and members of the steel trade will also display a sense of responsibility by rolling back their steel prices to curb inflationary trends."

"The Indian industry must stand together and desist from making exploitive profits to arrest the scourge of inflation," he added.

The recent upward spiral of prices would without doubt dampen the current robust consumer demand for goods, he said adding, the responsible corporates need to exercise moderation at all levels in an endeavour to hold the price line.

The failure to do so could push the economy into another demand downturn, Tata added.