NEW DELHI/BOMBAY (Reuters) - Millions of Indian truckers stayed off the roads for a third day on Monday in protest against a proposed service tax on freight booking agents.
While some companies said they were not yet affected by the strike, ports were starting to feel the heat.
J.M. Saksena, secretary general of All India Motor Transport Congress, said the strike was costing the transport industry 5 billion rupees ($108 million) a day.
"Raw materials are not reaching factories, and finished goods are not reaching shops," Saksena said.
The strike could fuel India's wholesale price inflation, which hit a 3-1/2-year high of 7.96 percent in the year to Aug. 7 due to higher energy and manufactured product prices. Saksena told Reuters 2.41 million heavy commercial vehicles and 510,000 light commercial vehicles had taken part in the strike.
"We're ready for talks with the government, but there can be no compromise on the service tax," he said.
The unions held one round of talks with the finance ministry on Monday, and were due to meet again later in the day.
Transport of vegetables, milk, water, poultry and medicines were exempt from the strike, the unions said.
Some companies reported no immediate impact because they had stocked up in advance, although a prolonged transport disruption would hit their operations.
Oil companies reported no disruption in the supply of products to retailing outlets, but they expected diesel sales to fall due to the lack of consumption by truckers. Port operations were, however, beginning to see an impact, officials said.
In its general budget for 2004-2005, the government proposed imposing a 10 percent service tax on transport-booking agents in a bid to widen the service tax net and boost revenue.
It has clarified that the tax is applicable only to booking agents and not truck owners or transporters, but the industry says they are generally the same.
Transport industry officials say it already is burdened by high fuel prices, a host of other levies and the need to replace vehicles older than eight years.
PORTS FILLING, CORPORATES WATCHFUL
T.R. Revankar, traffic manager at Kandla, one of India's busiest ports, said part of the cargo was being sent by the rail network, but nearly 1,500 trucks that carry goods from the port were off work on Monday.
"Loading and unloading goods of vessels is going on as normal. Our large stockyard could be full within days if the strike continues," Revankar said.
Top steel makers Steel Authority of India and Tata Iron and Steel Company lTD said they were not affected because most of their material was moved by the railways.
"There is some level of stocking in the trade, and we also stocked our factories ahead of the strike so production wouldn't be disrupted. So we are good for the next few days," said Hoshedar K. Press, president of Godrej Consumer Products Ltd.
"But the strike is worrisome, and we are waiting and watching."
"We took some precautionary steps last week in anticipation, and so neither our production nor our distribution has been affected," said B.V.R. Subbu, president of Hyundai Motor India Ltd., India's second-largest car maker.
A nine-day truckers strike in April 2003 crippled deliveries and slowed quarterly industrial growth to 4.9 percent, compared with over 6 percent growth between January and March that year.