The Hindu Business Line : Govt effects further import duty cuts with Singapore

As per FTA on goods, import tariffs in the phased elimination list are to be eliminated in five stages leading up to zero tariffs from April 1, 2009.

New Delhi April 5 In keeping with its tariff elimination and reduction commitments with Singapore, the Government has effected further duty cuts to as many as 4,500 items as part of the India-Singapore Comprehensive Economic Co-operation Agreement (CECA).

For the phased elimination list of about 2,200 items, the Government has increased the level of duty concession from 25 per cent to 50 per cent. The duty cuts are effective from April 1.

As per the free trade agreement (FTA) on goods, which formed part of the CECA, import tariffs 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. The India-Singapore CECA came into effect from August 1, 2005.

"The import duty concessions have been deepened towards meeting the terminal year commitments," a Finance Ministry official told Business Line.

The Government has also increased the level of concession from 10 per cent to 20 per cent for the phased reduction list, which has about 2,300 items.

Bilateral Trade

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

The bilateral trade between Singapore and India stood at Rs 38,961 crore in 2005-06, up from Rs 29,888 crore in the previous year.

India's trade balance with Singapore remained negative till 2002-03, but became favourable from 2003-04. During 2006-07, the India-Singapore CECA was reviewed for smooth and purposeful implementation of the agreement.

The mutual recognition agreement in goods is expected to be operationalised this year for both `electrical and electronic sector' and `telecom sector'.

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