INDIA BUSINESS WORLD - DECEMBER 16th - DECEMBER 31st
- 2007
INDIA OPENS DOORS TO SINGAPORE, SLASHES DUTIES ON 539 PRODUCTS WHICH INCLUDE MACHINERY, CHEMICALS & TEXTILES
Singapore will now have wider access to the Indian market under the bilateral comprehensive economic partnership agreement. India has decided to agree to eliminate or reduce tariffs on 539 products as an additional concession. The tariff reduction, mainly on items related to machinery, mechanical appliances, chemicals and textiles, will be spread over a eight year period starting January 15, 2008.
The move is not likely to please the Indian industry, which has complained of disproportionate gains to Singapore from the Comprehensive Economic Cooperation Agreement (CECA). According to a study by Ficci, India's trade surplus with Singapore has shrunk after CECA came into force in August 2005. Ficci said India had a surplus of over $1.3 billion in 2004-05 before the FTA in goods was implemented. However, in 2006-07, this surplus narrowed to less than $600 million and turned into a deficit of over $300 million in the first four months of the current year.
Of the 539 tariff lines, tariff elimination is to be achieved in five equal cuts between January 15, 2008, and December 1, 2011, for 307 items. These 307 items comprise mainly articles of base metal, machinery and mechanical appliances, chemicals, and textile and textile articles, an official release said. For 97 more products, tariff elimination is to be achieved in nine equal cuts between January 15, 2008, and December 1, 2015. These 97 items comprise machinery and mechanical appliances, plastic and rubber articles, and textile and textile articles.
For 135 products, tariff reduction to 5% is to be achieved in nine equal cuts between January 15, 2008, and December 1, 2015. These items comprise mainly chemicals, plastic and rubber articles, and machinery and mechanical appliances.
Under the existing trade in goods agreement, about 83% value of India's imports from Singapore are covered under products for which tariff is being eliminated or reduced. After the proposed additional tariff concessions, the coverage would go up to 93%.
It has also been decided to extend, under India-Singapore CECA, additional concessions that India may offer under Asean-India FTA in goods in terms of product coverage, timeline and rules of origin, the release said.
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