In a major step towards increasing economic cooperation between India and Singapore, the Cabinet on Monday cleared the Comprehensive Economic Cooperation Agreement (CECA), which is to be formally inked when the Singapore Prime Minister visits India later this month.Under CECA, India will allow three major Singapore banks to set-up wholly-owned subsidiaries in the country, which will be treated on par with Indian commercial banks. The agreement will also see Singapore recognising 129 Indian degrees, whereby professionals will be eligible to work in the island state.The government will also allow Temasek and Singapore Government Investment Co to hold up to 20 per cent stake in Indian companies.This is India’s first CECA with any country and also for the first time India is entering the bilateral economic integration agreement in services. The agreement covers trade in goods and services, investments and mutual recognition agreements in services, and conformity assessment of standards in goods. It would also have cooperation pacts in customs, science and technology, education, media, E-commerce and intellectual property.DBS holdings, Overseas Chinese Banking Corp (OCBC) and United Overseas Bank will be given national treatment at par with Indian banks with regard to branches, places of operation and prudential requirements, as governed by RBI, Commerce Minister Kamal Nath told newspersons after the Cabinet meeting here.In turn, Indian banks already operating in Singapore will qualify for national treatment there, which means they will be allowed electronic fund transfer and clearance besides use of local ATMs, he said.Giving details, Nath said the two countries will totally eliminate customs duties on 506 items from August 1 this year as part of the early harvest programme. Three other categories phased elimination, phased reduction and a negative list have also been cleared for goods trade between the two countries.To boost foreign investments, CECA has weaved in a double taxation avoidance agreement on the lines of the one with Mauritius with additional safeguards like sharing of information to prevent its misuse. The issue was a major bone of contention between the Finance and Commerce Ministries as the Mauritius route was seen as leading to money laundering, but Nath said the reservations had been addressed and stringent Singapore laws would take care of these fears.The 739-page Agreement also provides for easing of visa restrictions for Indian professionals.Singapore Snapshot• Three Singapore banks in India to be treated on par with domestic commercial banks• Singapore to recognise 129 Indian degrees for employment visa purposes • Duty on imports of 506 items to go from August 1, 2005• Singapore to allow Indian goods at zero duty, Indian beer can now be sold in Singapore• FDI, FII investments allowed along similar lines to Mauritius Double Taxation treaty
