The Hindu Business Line : More import duty sops to Singapore under FTA

Duty obligations
The Government has increased the level of duty concession from 10 per cent to 25 per cent for phased elimination list.
For phased reduction list it has increased the concession from 5 per cent to 10 per cent.

New Delhi , May 1

The Finance Ministry has increased the import duty concessions on nearly 4,500 items as part of the efforts to meet the tariff elimination or reduction commitments undertaken in the comprehensive economic cooperation agreement (CECA) with Singapore.

Under the free trade agreement (FTA) on goods, which is part of the CECA, import tariffs on items in the phased elimination list are to be eliminated in five stages leading up to zero tariffs from April 1, 2009.

The percentage reduction is expressed as a margin of preference over the most favoured nation (MFN) applied rates.

For the phased reduction list, the FTA specified that tariffs would be reduced in five stages leading to tariffs equivalent to 50 per cent of MFN from April 1, 2009.

The CECA with Singapore came into effect from August 1, 2005.

To meet the commitments under the agreement, the Government has now increased the level of duty concession from 10 per cent to 25 per cent for the phased elimination list. The Government has also increased the level of concession from 5 per cent to 10 per cent for the phased reduction list.

"We have increased the margin of preference under both the phased elimination as well as phased reduction lists. The import duty concession has been deepened towards meeting the terminal year commitments under the free trade agreement (FTA) in goods, which is part of the CECA," a Finance Ministry official said.

The bilateral trade between Singapore and India stood at $6.409 billion in 2004-05, up from $2.341 billion in 2000-01. India's trade balance with Singapore remained negative till 2002-03, but became favourable from 2003-04.

The balance of trade was tilted in favour of India at $1.24 billion in 2004-05. India's imports from Singapore increased from $1.464 billion in 2000-01 to $2.584 billion in 2004-05.

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