The Singapore CECA, signed in June 2005, was the first-of-its-kind agreement that India signed with any country. The agreement not only entails duty cuts and reduction in duties on goods but also focuses on ways and means to increase trade in services as well as facilitation of investments.
According to experts, more than trade in goods, India stands to gain from the services and investments components of the agreement.
"Import tariffs on goods were already lower in Singapore before the agreement. Thus, exporters from that country stand to gain from the CECA on trade in goods," said a Delhi-based expert.
Today's Cabinet decision comes when a free trade agreement is being negotiated with the Asean trade bloc, of which Singapore is a member.
The decision also includes a clause that any additional benefits extended to the Asean FTA in the future will also be extended to Singapore.
In another decision, the Cabinet decided to place the Eleventh Five Year Plan before the National Development Council (NDC) for approval. The NDC meeting will be held on December 19.
Announcing the decision taken at the meeting of the Union Cabinet, chaired by Prime Minister Manmohan Singh, last night, Information and Broadcasting Minister Priyaranjan Dasmunsi told reporters that this would enable operationalisation of the plan for the period 2007-12.
The draft plan document was cleared by the Planning Commission on November 9, with a target of 9 per cent annual economic growth, up from 7.6 per cent in the Tenth Plan.
NDC, the country's highest policy making body, comprises the Prime Minister, Union ministers, state chief ministers and members of the Planning Commission.
The Plan, the most ambitious document prepared by the Commission so far, aims at raising the average gross domestic product (GDP) growth rate to 9 per cent with an estimated outlay of Rs 36,44,147 crore (Rs 36.44 trillion).
Among other things, it also proposes to increase farm sector growth rate to 4 per cent from 2.13 per cent in the previous Plan.
The Plan proposes to reduce poverty by 10 percentage points, generate 70 million new employment opportunities and reduce unemployment among educated persons to less than 5 per cent.
It will also focus on the education sector by increasing the outlay to 19 per cent of the Central budgetary support from less than 8 per cent in the previous Plan.
Other cabinet decisions