The Hindu : Business : CECA will not cause flood of imports: Kamal Nath

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Friday, Jul 01, 2005

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CECA will not cause flood of imports: Kamal Nath

Special Correspondent

Singapore has now become an important investment hub

WIDENING COOPERATION: The Union Commerce Minister, Kamal Nath, calling on the Singapore Prime Minister, Lee Hsien Loong, in New Delhi on Thursday. — Photo: Anu Pushkarna

NEW DELHI: Commerce and Industry Minister Kamal Nath on Thursday sought to reassure Indian industry that the Comprehensive Economic Cooperation Agreement (CECA) with Singapore would not lead to a flood of imports from third countries since Singapore had provided sufficient safeguards in the agreement to eliminate any possibility of switch trade.

Addressing a joint press conference with the Singapore Trade Minister Lim Hng Kiang, he stressed that Singapore had strong laws on certification of origin. These "tight" laws on Rules of Origin have been built into the agreement. He described Singapore as the gateway for the ASEAN countries along with being a financial and trading hub. It had now become an investment hub, especially for ASEAN countries. He said that along with CECA, the two countries had signed a Bilateral Investment Protection Agreement and a Double Taxation Avoidance Agreement. These would, he felt, now enable investments to be routed through Singapore rather than through Mauritius via shell companies.

Asked about the proposed cooperation in the banking sector, he said three Singapore banks would be allowed to set up subsidiaries or open branches in India. These banks include DBS Holdings, Oversea Chinese Banking Corporation Limited and United Overseas Bank Limited. As far as priority sector lending norms were concerned, however, he said these will not apply but it would be up to the banks concerned to take a decision on this issue.

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