Sunday, July 31 2005 12:30 Hrs (IST) - World Time -

New Delhi: Opening yet another chapter in its trade relations, India will allow duty free import from Singapore of as many as 506 items ranging from chemicals and gases to PCs, laptops and even aeroplanes as the bilateral Comprehensive Economic Cooperation Agreement (CECA) takes effect.

Besides these 506 products specified in the Early Harvest Programme, duties on another 2,202 products will be reduced from August 1 with an aim to completely eliminate duties in five stages from April 1, 2009.

The CECA, signed by Prime Minister Manmohan Singh and his Singapore counterpart Lee Hsien Loong on June 28, also provides for phased reduction in duties on 2,407 products beginning tomorrow. The duties will be reduced on the basis of margin of preference accorded by India.

However, 6551 items have been kept in the negative list on which there will be no duty cuts and will enter in the country on the applied Most Favoured Nation (MFN) tariffs.

Singapore, on the other hand, already allows zero duty entry on imports from India on all items except for six items.

From tomorrow, even these six, which includes Indian beer, will be allowed duty free.

The opening of the market is expected to increase two-way trade to $50 billion in next 4-5 years from $6.4 billion in 2004-05. India had a surplus of $1.2 billion last year but with the country allowing zero duty entry on 506 items and reduced duties on over 4500 others, the balance of trade is expected to shift in the favour of the Asian tiger.

Though India has offered to reduce or remove duties on only 45 per cent of products, these items cover 80 per cent of Singapore's exports to India.