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CECA
with Singapore: `most issues resolved'
By P. S. Suryanarayana
Online edition of India's National Newspaper - The Hindu
Thursday, Mar 31, 2005
SINGAPORE, MARCH 30. A
comprehensive economic cooperation agreement (CECA) with
Singapore, India's first such pact with any country, "will
happen in the short term,'' according to the Union Finance
Minister, P. Chidambaram.
In an interview to The
Hindu on Tuesday, at the conclusion of his visit here,
Mr. Chidambaram said: "The legal scrubbing [of the
proposed document] is now on, and that may be completed
in about two weeks. There are a couple of issues which
need to be resolved. I think both countries have shown
great willingness to resolve these issues.''
Noting that these residual
issues were "not major'' in scope, he identified
them as "the space to be allowed to banks in India
and one or two clauses of the double-taxation-avoidance
agreement.''
About the issue of who
might gain more within the framework of the `win-win CECA'
which the two countries have been negotiating for nearly
two years now, Mr. Chidambaram said: "That is not
the approach to a comprehensive economic cooperation agreement.
You don't measure in golden scales who won a few grains
more or who lost a few grams. We see it as long-term cooperation
between India and Singapore.''
Asked whether India may
need to take some steps to gain acceptance as a member
of the proposed East Asian Economic Community, the Finance
Minister said: "If we are invited, we will be happy
to attend [the preparatory summit]. I think the countries
of ASEAN [Association of South East Asian Nations] are
inclined to invite India. A summit in Asia without India
or without China or both will be like a bird flapping
on one wing or no wing at all... That's a decision which
the ASEAN countries have to take.''
Asian Bond
scheme
On India's attitude towards
the emerging Asian Bond scheme, he said, "there are
pros and cons,'' which were now under discussion, and
"no decision has been taken'' by New Delhi at this
stage.
Giving an update on the
State-level value-added tax, which foreign investors have
welcomed, Mr. Chidambaram said: "21 States have reaffirmed
their intention to introduce VAT from April 1... It doesn't
matter if a few States join after a couple of months.
This is the most important tax reform attempted, say,
in 70 years".
Viewed in this perspective,
it was already "a big move forward" that 21
States had by now signed on.
On the issue of rupee convertibility,
he pointed out that the currency was already convertible,
on the capital account, for foreign investors.
"There is no real
compelling need to quickly move to full capital account
convertibility.''
Asked whether India would,
like the U.S., suggest that China revalue its currency,
Mr. Chidambaram said: "Surely, no Indian Finance
Minister is going to express a position on China's currency.
It is China's autonomous decision. We have a market-determined
exchange rate and we are quite happy with a two-way movement
of exchange rate. But I am not going to be judgmental
about what China does or does not do.''
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