Financial Daily from THE HINDU group of publications
Tuesday, Apr 12, 2005
Industry & Economy
Logistics - Airlines
India, China sign pact to relax aviation linkages Joint group moots regional trade arrangement
New Delhi , April 11
WHILE moving towards a Regional Trade Arrangement (RTA), India and China today entered into formal understanding to engage in a wide-ranging dialogue over the financial sector and to substantially liberalise civil aviation linkages that would result in a major increase in flight frequencies between the two countries.
The civil aviation agreement seeks to increase the flight frequencies of designated airlines of each side to 14 per week on the IATA summer season of 2005, that would go up to 28 flights during the winter season and to 42 flights during the summer season of 2006. At present, each side operates seven flights a week.
The two sides would also adopt `open skies' policy for cargo with unlimited capacity entitlement for dedicated cargo services.
Agreement has also been reached to simplify visa procedures for operating and cabin crew and employment of foreign pilots by the designated airlines of either side. The airlines would also be allowed to dry lease aircraft for both combination services and cargo sharing services.
Under the MoU, designated airlines of both parties are entitled to have unlimited third, fourth and fifth freedom traffic rights while they can co-terminalise any two points in its own territory and/or any two points in the territory of the other party without a cabotage rights with the exception for airlines designated by India to combine Beijing and Shanghai, Beijing and Guangzhou, Shanghai and Guangzhaou.
The dialogue on the financial sector would seek to develop bilateral cooperation between the banking sectors, capital market and the regulatory authorities of the two countries.
The countries have also agreed to increase cooperation and coordination at multilateral forums such as the International Monetary Fund, the World Bank and the Asian Development Bank.
Meanwhile, the India-China Joint Study Group (JSG) on comprehensive trade and economic cooperation has recommended an RTA to promote trade in goods and services and for enhanced bilateral investments.
The JSG report, that was presented to the Prime Minister, Dr Manmohan Singh, and the visiting Chinese Premier, Mr Wen Jiabao, has also suggested the setting up of a Joint Task Force that would undertake a detailed study on the feasibility and benefits that may be derived from the RTA and give recommendations on the various trade and investment issues.
The report of the JGS was finalised and signed by the two co-chairmen, Dr Rakesh Mohan, Secretary, Economic Affairs, Government of India and Mr An Min, Vice-Minister, Ministry of Commerce of the Chinese Government, during the meeting of the group in New Delhi in March.
The two sides have also entered into an agreement for mutual administrative assistance and cooperation in Customs matters that seeks to enhance cooperation between the Customs administrations of the two countries in enforcement of Customs laws. Besides, prevention and investigation for combating Customs offences, the agreement allows special surveillance of goods either in transport or in storage.
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