However, the additional duty on imports of industrial oils (import duty is 30 per cent), used to manufacture toilet soaps, comes as a rider to this growth benefit and is expected to negate the excise reduction benefits, says Indian Soaps & Toiletries Makers' Association (Istma) secretary general VP Menon.

Among the major beneficiaries is multinational Hindustan Lever Ltd (HLL) and the detergent-major Nirma Ltd. HLL has a market share of 65 per cent in toilet soaps followed by Nirma with 15 per cent and Godrej Soaps with a share of 8-9 per cent.

However, it is unclear now whether prices will be reduced on the basis of the excise duty reduction without taking into consideration the overall inflationery impact, said anindustry expert. Detergent prices, are however, set to drop, said an industry expert.

Soap manufacturers import industrial oils in bulk and will thus be for the manufacture of the toilet soaps. The surcharge is likely to have an inflationary impact on toilet soaps, said analysts.

Companies had undertaken price hikes to the tune of five to eight per cent during 1998-99, in detergent and toilet soap products partially on the ground that input costs had risen.

For HLL, soaps and detergent is a Rs 2,500 crore business. This segment contributes over 20 per cent to P&G's sales. Nirma is a leader in detergents with a share of 35 per cent and 15 per cent in soap. Soaps contributes 40 per cent to Godrej's turnover which is close to Rs 300 crore.