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CECA accord with Singapore makes textiles cheaper
04 Jan '11
2 min read
The Finance Ministry of India, in conformity with a tariff elimination package under a bilateral free trade agreement with Singapore, has slashed the Customs duty on 539 manufactured goods.
Such slashing of duties is likely to trim down the cost of imports of a number of manufactured items like textiles, textile articles and machinery.
However, according to the industry experts, this would lead to a reduction in the protection that the domestic industry in these sectors has enjoyed, so far.
As the trade pact, formally called the Comprehensive Economic Cooperation Agreement (CECA), became effective in August 2005, both India and Singapore laid open their trade in goods by lowering the Customs tariffs.
Post implementation, the CECA for the first time was reviewed in 2007, when India consented to expand the cover of its tariff reduction package to another 539 items covered under the trade in the goods chapter. India then consented to abolish import duty on 307 of the 539 items, with the elimination taking place in five proportionate parts between January 15, 2008 and December 1, 2011. Machinery, textiles, textile articles, base metals and chemicals are the main items included in the list of 307 items.
With the recent cut in the Customs duty on the 539 items taking place, almost 307 items have come very close to zero-duty access and are seen to earn a complete duty free access from December 1, 2011.
Such slashing of duties is likely to trim down the cost of imports of a number of manufactured items like textiles, textile articles and machinery.
However, according to the industry experts, this would lead to a reduction in the protection that the domestic industry in these sectors has enjoyed, so far.
As the trade pact, formally called the Comprehensive Economic Cooperation Agreement (CECA), became effective in August 2005, both India and Singapore laid open their trade in goods by lowering the Customs tariffs.
Post implementation, the CECA for the first time was reviewed in 2007, when India consented to expand the cover of its tariff reduction package to another 539 items covered under the trade in the goods chapter. India then consented to abolish import duty on 307 of the 539 items, with the elimination taking place in five proportionate parts between January 15, 2008 and December 1, 2011. Machinery, textiles, textile articles, base metals and chemicals are the main items included in the list of 307 items.
With the recent cut in the Customs duty on the 539 items taking place, almost 307 items have come very close to zero-duty access and are seen to earn a complete duty free access from December 1, 2011.
Fibre2fashion News Desk - India
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