The Hindu Business Line : `Singapore pact is a step towards India-Asean FTA'

The Singapore Prime Minister, Mr Lee Hsien Loong, with the Minister for Commerce and Industry, Mr Kamal Nath, the CII past President, Mr J.N. Godrej (extreme left), the Assocham President, Mr Mahendra Sanghi, and the FICCI Senior Vice-President, Mr Saroj Kumar Poddar (extreme right), at a luncheon meeting in the Capital on Thursday. — Kamal Narang

New Delhi , June 30

THE visiting Prime Minister of Singapore, Mr Lee Hsien Loong, today said the stage was set for an Asian Renaissance to be achieved through strengthening India's ties with Asia, evolving a stable, open regional architecture and reaching national consensus on globalisation and economic reforms.

Speaking at a luncheon meeting hosted by India's leading chambers of commerce and industry — CII, FICCI and Assocham here, Mr Lee said, "We need to strengthen economic ties between India and other Asian countries, especially with Southeast Asia. While Southeast Asia's trade with India is growing rapidly, it is still only15 per cent of its trade with China," adding that the centrepiece of India-Asean cooperation is an FTA which would build "a strong bridge across the two regions".

Stating that the comprehensive Economic Co-operation Agreement (CECA) signed on Wednesday by the two counties was a significant step towards an India-Asean FTA and deeper engagement between India and Southeast Asia, the Singapore premier allayed fears over cheap goods flooding the Indian market, stating that "we are also small and industrialised, our economy complements India's economy, and does not threaten India's sensitive sectors".

He said Singapore-India trade at almost $7 billion is already half of total Asean-India trade of $15 billion, and as such, his country could play "a useful role as a pathfinder for India".

Air passenger services: He said bilaterally, the CECA is just the start of what Singapore and India could do together and one obvious area for deeper engagement was in air passenger services. He said by maintaining a liberal aviation policy, Singapore attracts eight million tourist a year and between Singapore and China there were unlimited flights. But between Singapore and India travellers have great difficulty getting air tickets. He hoped that soon "we will be able to liberalise air services between India and Singapore, so that we can generate further spin-offs throughout our economies".

He said that Asia needs a stable and open regional architecture. While strengthening regional cooperation, "we must continue to keep the region open and connected to the rest of the world, and in particular, we have to keep the US engaged in Asia".

He said one significant new imitative in regional cooperation is the East Asian Summit (EAS) to be held in December. He said that Asean has decided that the EAS should include not just Asean plus three, but also India.

The Singapore Prime Minister stressed the need for consensus among the people of each country over economic reforms and globalisation and politicians must persuade their people that the adjustments are necessary and rally them to support or at least accept change. He reminded the captains of Indian industry and trade about their crucial role in establishing a strong axis of cooperation between "our countries and our regions".

Mutual Recognition Agreements: In his address, the Union Commerce & Industry Minister, Mr Kamal Nath, hoped that through the CECA the bilateral trade would cross $10 billion in two or three years. He said the CECA pact on Goods was based on the premise that an enormous synergy could be activated between the huge manufacturing base of India and the exciting trading interface that Singapore has with the global marketplace.

Mutual Recognition Agreements (MRAs) in Goods would substantially step up these exports in dairy and poultry related activities and "we believe that the benefits of CECA will thus percolate down to our agricultural hinterland". Similarly, he said, MRAs in Service means increased interaction in various services sectors, which would help, improve efficiency "in our economy and at the same provide new avenues to Indian professionals".

Earlier, addressing a joint press conference with the Singapore Minister for Trade & Industry, Mr Lim Hng Kian, Mr Nath described the CECA as a "win-win" pact as it is the first such comprehensive cooperation agreement for enhanced investment and increased flow of goods and services. He said Singapore is a gateway for a wider Asean market and a major trading hub.

He said the two countries signed Bilateral Investment Protection Agreement and Double Taxation Avoidance Agreement, similar to the one with Mauritius, building additional safeguards to avert misuse by shell companies.

Describing the CECA as "mutually beneficial", Mr Lim said, "We would like to attract Indian companies to make Singapore a base for foray into the Asean region."

Asked about the grant of qualified full bank (QFB) status to three Indian banks, Mr Lim said, "The Singapore Government was waiting for application from Indian banks which would have to meet the prudential norms set by the Central Bank of Singapore".

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