Nov. 18 (Bloomberg) -- India is considering industry- specific steps to help companies counter the impact of a global financial crisis as Asia's third-biggest economy slows.

``We are looking at sectors which require special attention. I am open to adopt fiscal measures depending upon the need of each sector,'' Finance Minister Palaniappan Chidambaram said at a press conference in New Delhi today. Import taxes on some steel items and crude soybean oil were reimposed today to protect domestic producers.

Companies in industries such as real estate, automobiles and steel have cut output and deferred projects to cope with a drop in demand in the world's second-most populous nation. India has lowered interest rates, relaxed overseas borrowing rules and initiated a process to allow higher foreign ownership of domestic insurers to ease a credit crunch and infuse confidence.

India's economy may slow to 7.5 percent in the year ending March 31, after expanding 9 percent or more annually in the previous three years, according to the central bank.

Both the finance minister and the Reserve Bank of India Governor Duvvuri Subbarao have reiterated that appropriate action will be taken when required.

``We have decided that we'll keep a careful watch on the situation and act speedily and swiftly as the situation evolves,'' Chidambaram said.

The government today reimposed a 5 percent import tax on some steel items, the ministry of finance said. It also reimposed a 20 percent customs levy on crude soybean oil.

Price Decline

``In the wake of the recent fall in the international prices of commodities and with a view to safeguard the interests of domestic producers, government has carried out certain changes in the customs duty rates,'' the ministry of finance said in a release today.

The levy on steel imports follows demands from local steelmakers hurt by lower prices overseas.

Steel imported from China was cheaper by about 9,000 rupees ($181) a ton in the Indian market, Vinod Mittal, managing director of Ispat Industries Ltd.

Ispat Industries may cut as much as 40 percent of its production as demand slumps from Ashok Leyland Ltd. and Tata Motors Ltd., the nation's biggest makers of trucks and buses, Mittal had said.

The Kolkata-based steelmaker will follow local rival JSW Steel Ltd. in slashing output as consumers delay purchases of homes and cars, driving down steel demand and prices.

Borrowing Costs

Car sales have fallen in three of the past four months as dealers struggle to raise financing and consumers pare spending because of the economic slowdown and rising borrowing costs.

Moves including an interest-rate cut and lower reserve requirements for banks have so far failed to boost lending to dealers, the Society of Indian Automobile Manufacturers said last week.

Tata Motors shut its Jamshedpur plant from Oct. 6 to Oct. 8 and its Lucknow factory from Nov. 10 to Nov. 15. It will also halt commercial-vehicle production at its factory in Pune between Nov. 21 and Nov. 26, according to a company statement last week.

Ashok Leyland said earlier this month its plants will work on a three-day schedule for the next two months because of falling demand.

DLF Ltd., the country's biggest property developer, has deferred some projects and plans job cuts, Chairman Kushal Pal Singh said today. The company's shares have plunged to nearly a fifth of their value at the start of this year amid a slump in property prices.

Overseas investors have sold $13 billion of Indian stocks this year, pulling the benchmark index down by 56 percent, reversing a record $17.2 billion purchase of equities in 2007.

Prime Minister Manmohan Singh's government has switched its focus from inflation to liquidity and growth as it seeks to shore up the economy before elections due by May 2009.

To contact the reporters on this story: Kartik Goyal in New Delhi at kgoyal@bloomberg.net; Subramaniam Sharma in New Delhi at ssharma@bloomberg.net.

Last Updated: November 18, 2008 10:15 EST