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Cabinet
Approves India-Singapore Comprehensive Economic Cooperation
Agreement
India's
First Ceca With Any Country - Also First Bilateral Agreement
in Services
CECA a Milestone, saya Kamal Nath
14:33 IST
Press Information Bureau
The Cabinet
today approved the Comprehensive Economic Cooperation
Agreement (CECA) between India and Singapore. Briefing
newsmen after the meeting of Cabinet here today Shri Kamal
Nath, Union Minister of Commerce & Industry said that
"CECA would be a milestone in further cementing
India's traditional ties with Singapore... This is India's
first CECA with any country. It is also for the first
time that India is entering into a Bilateral Economic
Integration Agreement in Services".
The Agreement is an integrated package comprising trade
in Goods and Services, an agreement on Investments, mutual
recognition agreements in conformity assessment of standards
in goods, mutual recognition agreement in Services, cooperation
agreements in customs, science and technology, education,
e-commerce, intellectual property and media.
In trade in goods, India's offer is categorised
in four lists -- the early harvest programme where
the customs duty would be eliminated immediately on the
entry into force of CECA (506 lines); the phased elimination
(2202 lines) and phased reduction (2407 lines) where the
tariffs would be eliminated/reduced in a phased manner
up to the year 2009 and the negative list (6551 lines)
where no concessions have been offered. Trade in goods
will include exchange of tariff concessions under the
8-digit ITC Harmonised System (HS) Code covering 11666
lines.
"Singapore has offered all products made in India
entry at zero duty into Singapore. It is expected that
CECA would be helpful in developing supply chains from
India, since Singapore is a known trading hub. The mutual
recognition agreements in goods provided in CECA would
increase India's exports especially in areas like milk
and milk products and poultry. The liberalisation of the
services sector would improve efficiency in economy, while
the mutual recognition of education degrees would provide
new avenues to Indian professionals. Furthermore, a major
gain would be that CECA will substantially increase investments
in India with Singapore. Already, Singaporean investments
in India increased by about 114% in 2004-05. Interest
has already been generated in Singapore for making investments
in India in infrastructure projects and in the Special
Economic Zones (SEZs)", Shri Kamal Nath said while
elaborating on the gains from the Agreement.
Sufficient safeguards have been built in to the Agreement
to prevent third country goods from coming in through
Singapore. Stringent Rules of Origin comprising
simultaneous application of change in tariff heading,
value addition of 40% and some well defined insufficient
operations have been prescribed under CECA to ensure
that only the goods which are actually manufactured in
Singapore and India benefit under this Agreement.
In Services, India and Singapore have taken commitments
beyond their offer at the WTO. In particular, in Financial
Services, a deeper integration with the Singapore financial
services is expected to take place.
A crucial component in services is the provisions relating
to movement of natural persons (Mode 4) which is a very
important mode of supply of services for India. The Agreement
accordingly contains a separate chapter which deals with
the issue. "In Mode 4, mutual recognition agreements
will be entered into within a period of 12 months in architecture,
accountancy and medicines. Around 120 professions are
being recognised from India for the purpose of obtaining
visas", Shri Kamal Nath said.
India and Singapore have committed to opening investments
on a positive list basis with features in-built for protecting
investments made by each other in either country.
The existing Agreement on Double Taxation Avoidance (DTAA)
has been amended through a protocol which provides for,
among other issues, sharing of information and improved
tax treatment.
The Agreement is scheduled to be signed by the Prime
Ministers of India and Singapore on 29th June, 2005 during
the visit of the Singapore Prime Minister to India. CECA
is expected to come into effect from 1st August, 2005.
SB/MRS
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