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India,
Singapore FTA’s ready to get off ground
SANJEEV SHARMA &
NANDINI SEN GUPTA
TIMES NEWS NETWORK[ SATURDAY, APRIL 16, 2005 12:23:59
AM]
The
Economic Times
NEW DELHI: The most contentious
issues holding up the Singapore free trade agreement (FTA)
have now been resolved and the trade pact is finally ready
for a roll-out. This includes the rules of origin (ROO)
issue, which was a sore point in both the Thai and Singapore
agreements.
According to a draft Cabinet
note, the two governments have managed to resolve a cross-section
of problems from tariff rates for trade in goods and services,
to customs information, mutual recognition agreements
(MRAs), investment guidelines, arbitration, air services
and movement of people.
On ROO, Singapore has agreed
to India’s proposal of the three criteria for change in
tariff heading (CTH) on all raw materials and 40% value
addition, along with some degree of manufacturing operations.
All of these will be necessary to get originating status
India, on the other hand,
has agreed to 543 products which are of export interest
to Singapore and which will be eligible for derogation
from the ROO.
Singapore has also accepted
India’s refusal of the concept of ‘outward processing’,
under which, goods are sent to third countries for manufacturing
operations. But if India agrees to this concept with any
FTA partner in the future, it will be offered to Singapore
as well.
On customs tariffs, India
has offered a four-tier structure covering 80% of Singapore’s
current exports. The structure includes an early harvest
list of duty-free imports, a phased elimination list where
duties will come down in three years from ’06-09, a phased
reduction roster where Singapore will be offered a margin
of preference on applicable rate of MFN duty and a negative
list
Singapore has agreed to
bind all tariff lines at zero duty. It has also agreed
to India’s proposal of flexibility on trade defence measures
like anti-dumping. u Related report on P 4
In areas like trade in
services, Singapore has offered commitments in a wide
range of sectors beyond its WTO ambit. And on the issue
of movement of natural persons, it has been agreed that
those drawing a salary equivalent to the prevailing salary
in Singapore will not be denied a visa.
However, Singapore and
India continue to differ on the telecom front, as the
FDI limit remains a bone of contention. While India is
willing to bind at 49%, Singapore wants a 74% ceiling.
The Cabinet note on India
Singapore Comprehensive Economic Co-operation Agreement
will be implemented after Cabinet approval on a “mutually
agreed date†| 
