The agreement, India's first ever, is an integrated package comprising trade in goods and services, an agreement on investments and mutual recognition agreements in services and conformity assessment of standards in goods.
It also has cooperation pacts in customs, science and technology, media, education, e-commerce and intellectual property.
The pact includes a bilateral investment protection agreement, a double taxation avoidance agreement with additional safeguards to avoid misuse by shell companies and a bilateral economic integration agreement in services.
As per the pact, India will allow three major Singapore banks to set up wholly-owned subsidiaries in the country.
The three banks - DBS Holdings, Overseas Chinese Banking Corporation and United Overseas Bank - will be given national treatment on par with Indian banks with regard to branches, places of operation and prudential requirements.
In turn, Indian banks already operating in Singapore will get full banking status which meant they will be allowed electronic fund transfer, clearance and use of local ATMs.
India has also allowed two FIIs - Temasek and Singapore Government Investment Company - to hold a total of 20 per cent stake in any Indian company as against the normal cap of 10 per cent put by market regulator SEBI.
The investment-friendly measures incorporated in the CECA are expected to boost FII flows to India by 300 per cent to $5 billion and FDI flow to around $2 billion in the first year of the agreement, officials said.
To boost bilateral trade, the two nations will eliminate customs duties on 506 items that comprise of 80 per cent of the goods presently traded between the two countries from August 1 this year as part of early harvest programme.
Two-way trade stood at $6.4 billion in 2004-05 with India having a surplus of $1.2 billion and with the elimination of duties, trade is expected to go up substantially.
The two sides would also eliminate duties on 2,202 items and reduce duties on 2,407 items in a phased manner by 2009.
There is also a negative list of 6,551 items where no concessions have been offered. Trade in goods will include exchange of tariff concessions under the eight-digit ITC harmonised system code covering 11,666 items.
To ensure that the CECA does not lead to Chinese goods flooding Indian markets, the pact has very stringent Rules of Origin, comprising simultaneous application of change in tariff heading and value addition of 40 per cent.
The 739-page agreement also provides for easing of visa restrictions for 127 categories of professionals from both countries. The areas include IT, medical, nursing, engineering, financial services, accountancy, university teaching and advertising.
There will be mutual recognition of 129 education degrees given by recognised universities and technical education boards for visa purposes, opening new avenues for Indian professionals.
