S'pore exporters faces problems at Indian ports
One year after the first bilateral trade pact between India and Singapore kicked off, exporters from Singapore are continuing to grapple with procedural issues at the Indian customs.
By TNN |
SINGAPORE: One year after the first bilateral trade pact between India and Singapore kicked off, exporters from Singapore are continuing to grapple with procedural issues at the Indian customs.
Singapore businessmen contend that lack of awareness about the lower duty structure under CECA among Indian custom officials was preventing them from availing lower tariff levels promised under the CECA.
In a review meeting held last week, the industry associations in Singapore were apprised by exporters of the problems they faced while attempting to export to India under favourable terms.
"Exporters are denied lower duties on their goods at all Indian ports, since the custom authorities at the ports have not been properly instructed. Some officials are even unaware of the provisions in the CECA, which Singapore is entitled to," Pradeep K Menon, Executive Director and CEO, Singapore Indian Chamber of Commerce and Industry said. Exporters were finding it difficult to circumnavigate red tapism in the country.
Unwilling to bear higher inventory costs due to procedural issues involved in tackling the administration in various ports in India, exporters are choosing to pay the tariffs that prevailed before the CECA was implemented. The losses on this account cannot be quantified, Menon said.
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He said that the matter was brought to the notice of commerce minister Kamal Nath, finance minister P Chidambaram and communications minister Dayanidhi Maran several times over the last few months. It is understood that the commerce minister has said that the matter will be looked into since the CECA is still evolving. The chamber has appealed for faster resolution of such issues through an organised mechanism. Though India is Singapore’s fastest growing trading partner, it is difficult to pinpoint how much of the trade could be attributed to CECA over the last year.
Trade volumes between the two partners have jumped from $10 billion in calendar year 2005, to about $16 billion by August 2006, continuing with the growth of over 40% for the last two years. There are more than 1900 Indian companies that have set up shop in Singapore that has the presence of nearly 7,000 MNCs to its credit.
Putting the onus of the success of CECA on Indian companies, Chua Taik Him, assistant managing director, Economic Development Board, Singapore said being the bigger country, India had the advantage of exploiting CECA to its advantage.
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"The onus is on the corporates for taking advantage of the provisions in CECA." He cited the FTA with USA, where American companies had benefited from the provisions, more than the Singapore companies. "To that extent, the CECA is uneven, since India, the larger trading partner can benefit more from it because of its size," Mr Him said responding to remarks about Sinagpore having a larger say in the formulation of CECA. He blamed the psychological barrier that exporters on either side have to cross to make CECA a success.
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Interestingly, Indian exporter interest in Singapore has increased after CECA, with some exporters assuming that zero tariff levels in Singapore were a product of CECA, despite the fact the city state had such tariff levels even before the agreement.Download
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