Singapore pact worries industry

Indian industry has objected to the government's proposal to remove or reduce duties on 2,342 items of trade in an agreement it is negotiating with Singapore.

A host of industry bodies, including the Automotive Component Manufacturers' Association, the Electronics and Software Export Promotion Council, the Egg Co-ordination Committee and the Rubber Board, has written to the commerce ministry saying elimination of import duties will hurt them.

The Federation of Indian Chambers of Commerce and Industry, on its part, wants tariffs on some petrochemical products be maintained at existing levels.

A joint study group of the two countries begins a two-day meeting in Delhi tomorrow and is expected to discuss free trade in goods, a dispute settlement mechanism and Customs procedures.

Indian industry has also demanded that rules be put in place in what is envisaged as a free trade agreement with Singapore, covering goods and services, to check third-country imports entering India.

While India wants the rules of origin to cover all imports, Singapore is pushing for a product-specific approach.

India and Singapore traded around $2.85 billion of goods and services in 2002-03, with India exporting around $1.42 billion.

The Telecom Engineering Centre and the agriculture ministry, too, have objected to agreements on import of farm products and telecom equipment.

Negotiations are under way for agreements on food and animal products, electronic and electrical goods, telecom equipment and pharmaceuticals.

The Automotive Component Manufacturers' Association has warned that inferior products could be imported through Singapore, affecting the local industry.

Textile companies are arguing likewise. The Electronics and Software Export Promotion Council has pointed out that some of the items on which tariffs are to be lowered are manufactured by the small scale sector.