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Changes to save industry from Singapore imports

NEW DELHI: In a bid to protect domestic industry, the Union Cabinet on Thursday granted ex post facto approval for changes in the India-Singapore Comprehensive Economic Cooperation Agreement (CECA). The modifications pertain to the approved list of 555 items qualifying for duty elimination.

Now 16 items stand deleted from the approved list under the CECA, while 14 others have been shifted to the ‘sensitive track’ category so as to protect domestic manufacturers from the onslaught of duty-free imports from Singapore, an official spokesperson said here.

Accordingly, the items deleted from the approved list (‘Normal track I & II’) and, therefore, open to import duty include discs for laser reading systems, still image and other video cameras, magnetic tapes and other electric sound/visual equipment and loudspeakers.

The items moved to the ‘sensitive track’ pertain mostly to the chemical and petrochemical sector and include linear low density polyethylene, linear medium density polyethylene and nylon moulding powder.

The CECA is already operational and a large number of items are being traded without being subject to any duty on either side. The bilateral agreement also lays down a road map for reduction as well as elimination of import tariff on a number of other products.

The Cabinet also approved a $3-billion currency swap agreement with Japan to safeguard the economy against any balance of payments (BoP) crisis in the near future.

The government will authorise the Reserve Bank of India to sign an agreement with the Bank of Japan to exchange $3 billion against the Indian rupee or the Japanese yen for mitigating short-term BoP problems. “It is an additional arrangement outside IMF [International Monetary Fund] to meet short-term liquidity in US dollars during a balance of payments crisis,” the spokesperson said.

During the visit of the then Japanese Prime Minister Shinzo Abe to New Delhi in August last, the two countries agreed to sign an accord on currency swap to provide emergency financial liquidity to either or both parties in times of turbulence in the currency or other market or other turbulence.

The objective of the deal is to help each other in the event of either of their currencies coming under the attack of speculators and thereby ward off any financial crisis of the likes of the East Asia meltdown in the late 1990s.

Japan has already entered into such swap agreements with Thailand, Korea, China, Malaysia, the Philippines, Singapore and Indonesia.

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