The Hindu Business Line : Petroleum Ministry not for pact with Singapore

THE Petroleum Ministry has opposed the Comprehensive Economic Cooperation Agreement (CECA) with the Singapore Government on the grounds that domestic refiners will suffer once CECA is implemented.

The proposed agreement seeks to allow import of 1300 items free of import duty. These include petroleum products such as bitumen and petroleum coke. Petroleum products sold by domestic refiners enjoy some level of protection determined by the import duty. The protection is often offset by the fact that imported products do not attract State levies like sales tax.

The Petroleum Ministry officials recently voiced their stand in a meeting taken by the Commerce Ministry which has prepared and circulated a Cabinet note on the issue. Even though mass consumption products such as petrol and diesel are not included, the Petroleum Ministry has opposed the proposed agreement.

In April 2003, the Commerce Minister, Mr Arun Jaitley, and the Singapore's Minister for Trade and Industry, Mr George Yeo, signed the declaration of intent to enter into formal negotiations on India-Singapore CECA. In the Declaration, the Ministers agreed that the Joint Study Group Report on the CECA would serve as a framework for subsequent negotiations.

In its report, the Joint Study Group concluded that the CECA would provide benefits for both countries, in terms of the potential for increased trade and investment, and through economic cooperation.

The CECA would be structured as an integrated package of agreements between India and Singapore will include a free trade agreement, which would include trade in goods and services, and investment, bilateral agreement on investment promotion, protection and co-operation, an improved Double Taxation Avoidance Agreement, a more liberal air services agreement and `Open Skies' for charter flights, a work programme for economic co-operation covering areas outlined in the Joint Study report, etc.