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INDIA-SINGAPORE
COMPREHENSIVE ECONOMIC COOPERATION AGREEMENT ("CECA")
On
June 29, 2005, after 13 formal rounds of negotiations, India and
Singapore successfully concluded the CECA. The CECA primarily
encompasses trade in goods, trade in services, investment protections
and other features. It is said that the Mutual Recognition Agreement
("MRA") will eliminate duplicative testing and certification
of products in specific sectors, and the co-operation chapters
in the CECA will facilitate bilateral cooperation in several sectors.
In addition, the Double Taxation Avoidance Agreement ("DTAA")
between India and Singapore has been amended to provide for sharing
of information and improved tax treatment. Some of the key features
of this CECA are as follows:
KEY
FEATURES OF CECA
1.
Capital Gains Tax - As per the CECA, tax residents
will enjoy capital gains tax exemption on investments in India,
subject to the limitations of benefits article.
2.
Trade in Goods - The Trade in Goods chapter provides
for tariff concessions that will make Singapore goods more competitive
vis-à-vis other foreign imports into India. Some of the sectors
that will benefit include electrical and electronics, instrumentation,
pharmaceuticals and plastics.
3.
Customs - The customs authorities in India and Singapore
will provide an advance ruling on the eligibility of originating
goods for preferential tariffs and tariff classification (upon
the request of the trader) and enhance the application of risk
management to focus on high-risk goods and facilitate the clearance
of low risk consignments.
4.
Standards and Technical Regulations, Sanitary and Phytosanitary
Measures - CECA provides a framework for concluding MRAs
to eliminate duplicative testing and certification of products
to facilitate entry of goods for sale in the respective markets.
5.
Investment - Investments in the nature of both Foreign
Direct Investment ("FDI") and portfolio investments are
covered. The chapter contains a number of useful features to protect
investments such as - (a) Indian investors are not required
to seek foreign investment approval for coverage, (b) there
are provisions for broad range of investment instruments and assets,
(c) national treatment to investors from both countries,
(d) requirement for expropriating investments, directly
or indirectly, being premised on public purpose and compensation
based on market value, (e) allowing investors, to take
a dispute to an international arbitration tribunal, (f)
allowing investors to freely transfer funds, (g) India
binding its recent liberalisation measures regulating the ability
of current joint-ventures to enter into new joint-ventures.
6.
Trade in Services -The services chapter ensures that
service suppliers in India and Singapore are guaranteed access
into each other's markets. For financial services, Singapore owned
or controlled financial institutions have been given greater privileges
to access the Indian market.
7.
Movement of Natural Persons - This chapter enhances
trade and investment flows by facilitating easier temporary entry
for four categories of business persons (business visitors, short
term service suppliers, professionals and intra-corporate transferee)
from India and Singapore.
8.
E-Commerce - The chapter on electronic commerce addresses
fair treatment of digital products, such as software, e-books
and e-movies, coming from Singapore and prohibits imposition of
customs duties on digital products delivered electronically.
9.
Intellectual Property ("IP") -The Parties have agreed
to undertake and promote mutually beneficial cooperation in the
fields of IP and Plant Variety Rights.
10.
Science & Technology - It expands an earlier agreement
on science and technology signed in 1995 and the areas of focus
that have been identified for possible cooperation are marine
and agricultural biotechnology, space research, advance materials
and information technology.
11.
Media - The media cooperation chapter offers a platform
for the regulatory agencies from both sides to work closely together
and promote greater industry and private sector collaboration.
Some of the areas of collaboration that could be looked into are
digital media and convergent services, intellectual property rights,
education and training, co-production of film and television content,
distribution and marketing, and research and development.
12.
Dispute Settlement - Disputes are subject to consultations,
negotiations, conciliation and arbitration thereby enhancing the
rule of law in international trade.
The
Ministers of India and Singapore who are responsible for trade
negotiations, will meet within a year of the date of entry into
force of CECA for a review. Subsequent reviews will be done biennially
or otherwise as appropriate.
This
is India's first ever CECA and is also the first comprehensive
economic pact between Singapore and a South Asian country. The
CECA is expected to enhance bilateral ties between both the countries
by catalysing the already growing flows of trade, investment,
ideas and people.
Source:
Signing
of the India-Singapore CECA
You
can direct your queries or comments to Bijal
Ajinkya or Roshni
Shanker.
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