* Indian states move to cushion impact with duty cuts

* Criticism grows of economic impact of strikes

* Malaysia to announce measures to ease burden

By Sujoy Dhar

KOLKATA, India, June 6 (Reuters) - Protests and strikes over fuel price rises spread across India on Friday despite moves to take the sting out of the hikes, while anger fizzled out in Malaysia as the government stood firm after larger increases.

However, state media said Malaysia's beleaguered leader, under pressure over a variety of issues before the hikes were announced, planned to give details next week of measures to ease the burden on consumers.

The governments of the fast-growing Asian nations were the latest to raise subsidised fuel prices this week, following similar moves in Indonesia, Taiwan and Sri Lanka.

Spiralling crude oil prices, which were trading over $134 a barrel on Friday, have driven up the cost of fuel subsidies for many governments to near crippling levels.

Both governments had delayed the decision until now after electoral setbacks, and amid concerns about rising inflation, but in India the strikes, called by communists and opposition parties, seemed as unpopular as the price rises.

"I am totally against the strikes since it is all about politics and faking concerns for people," said entrepreneur Ishan Ahmed, adding any government would have had to raise prices.

India increased petrol and diesel prices by around 10 percent, passing on just a fraction of the higher costs its oil companies are paying, and then, with elections looming, tried to cushion the blow by challenging state governments to cut their excise duties and sales taxes.

Several states have announced duty cuts of between around two and five percentage points. Others are expected to follow suit.

Nevertheless, strikes and protests at the fuel price hike -- called by opposition parties and the government's own communist allies -- spread around the country.

Transport was paralysed in the large states of Andhra Pradesh and West Bengal, as well as parts of Orissa, as mobs of opposition supporters besieged bus stations, sat on rail tracks and pulled people out of taxis.

Many businesses, including software firms, were closed in Kolkata and Hyderabad, a city competing with Bangalore to be India's Silicon Valley.

The problems facing the government less than a year before elections were underlined on Friday with news inflation rose to a fresh 3-½ year high of 8.24 percent.

Rising fuel prices could push the figure above 9 percent, analysts say, to a 13-year high.

But the protests have not gone down well with large swathes of the electorate, who say they are only making a difficult situation worse.

"The strike is no solution," said Pradip Mukherjee, a 25-year-old IT professional, who said two thirds of the revenue of Kolkata's software companies comes from the United States.

"Two days of strikes are a big blow to companies with U.S. clients and send the wrong message from West Bengal, which is trying to woo industry."

In New Delhi, a crowd of more than 1,000 supporters of the main opposition Bharatiya Janata Party protested near parliament, forcing police to use water cannon when a few dozen broke through two barricades.

POOR TURNOUT

But in Malaysia, barely half a dozen people turned out for an opposition-backed protest in the capital Kuala Lumpur, and the ruling coalition rejected calls to reconsider a 41 percent rise in petrol prices and a 63 percent increase for diesel.

The fuel hike is expected to drive inflation to a 10-year high of 4.2 percent this year, the central bank said.

Prime Minister Abdullah Ahmad Badawi's party met on Friday seeking to weather criticism of the price hikes that came just two months after the ruling coalition recorded its worst-ever performance in a general election during its 50-year rule.

"No," Domestic Trade Minister Shahrir Samad told reporters when asked if the government would bring fuel prices back to their earlier level.

However, Abdullah will attempt to appease public anger by revealing four measures next week to curtail the pain of the price rises.

He will detail steps for state bodies to save costs, widen the social safety net for the poor, increase the number of price-controlled items and improve public transport, state news agency Bernama quoted the premier as telling senior editors.

Earlier in the day, two demonstrations planned in Kuala Lumpur immediately after Friday prayers fizzled out with more police, reporters and onlookers showing up than protesters.

Opposition leaders said there will be more protests culminating in the biggest demonstration yet when they plan to bring 100,000 people into the city centre on July 12.

"There's real anger out there," Lim Guan Eng, a leader of the opposition Democratic Action party, told Reuters.

Abdullah has been trying to fend off a challenge to his leadership from within the ruling party and to prevent defections to the opposition that could topple his government.

"The 40 percent increase is suicidal for the government, I think their days are numbered," said political analyst Yahya Ismail. (Reporting by Soo Ai Peng and Liau Y-Sing in Kuala Lumpur, Bappa Majumdar in New Delhi and Jonathan Allen in Mumbai; Writing by Simon Denyer; Editing by David Fogarty and Jerry Norton)

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