India and Singapore's efforts and strategic planning have brought the bilateral linkages between them to such a juncture that further opening up and adhering to the '5s plan' of the Indian foreign Minister will enhance their partnership and make them achieve newer heights.
The relation between India and Singapore dates back to 14th century when Singapore was a juncture in the ancient route between India and Southeast Asia. Though the bilateral ties were cool in the 1980s, the relationship warmed up in 1994 when Singapore's Prime Minister Goh Chok Tong instituted "India Fever" which marked the beginning of the ongoing bilateral ties between them. The relationship further boosted up when India began the Look East Policy which coincided with Singapore's desire to balance its engagement with China, by helping to bring India into Southeast Asia.2 Since then, there has been an upswing in the trade and investment ties between India and Singapore, resource rich and resource dependent country respectively.
As pluralistic societies, the two countries share similar concern about the challenges posed by terrorism and fundamentalism and have, therefore, found it mutually beneficial to evolve a broad framework of security cooperation. Realising the potentials, which existed between both the countries, led them to take one of the major step of signing FTA-plus agreement CECA (Comprehensive Economic Cooperation Agreement) in June 2005. CECA was an integrated package of agreement comprising five major components: FTA on merchandise and services trade: bilateral investment agreement on promotion protection and co-operation in foreign investment flows among the two countries: refining existing Double Taxation Avoidance Agreement: an agreement to liberalize Air Services, including an Open Skies Agreement for Charter Flights: and finally a work program for economic cooperation in all areas of trade and investment cooperation, including cooperation in Tourism, setting up of an India-Singapore investment fund, and a setting up of a second India Centre in Singapore to harness Singapore's strengths as a business hub for Indian companies. 3 Since then the trade between India and Singapore has been increasing steadily reaching a record of US$ 19.4 billion in 2013-14 as compared to US$ 4.2 billion in 2003-04.
As described by India's External Foreign Minister Sushma Swaraj, the "partnership between India and Singapore is based on political, economic and cultural cooperation, with institutional frameworks of dialogue and vibrant people to people contact. And what makes their relationship unique is that it never rests on its successes; it strives constantly to be ahead of the curve, to be innovative and effective, and to add value and efficiency"4 . As a result of which Singapore has emerged as India's largest trading and Investment partner, one of the largest source of FDI globally replacing Mauritius and one of the largest destination for outward FDI flows.
Because of the execution of double taxation avoidance agreement (DTAA) with Singapore with limit-of-benefit (LoB) clause as a part of CECA agreement, the FDI inflows from Singapore added up to nearly $6 billion (over Rs 35,500 crore) in 2013-14, compared with $2.3 billion in the previous year. 5 As per Reserve bank of India statistics, cumulative outward Indian FDI into Singapore was US$ 23.42 till January 2012 and over 600 Indian companies operate in Singapore and some 6000 companies are registered with Singapore making it the largest business community in the city state. 6 Because of the good business environment, strong Air connectivity and the presence of large Indian community (which accounts for 9.1% of the total population of 5.4 million, including permanent residents)7 , Singapore has become one of the preferred financial hubs for many Indian corporate houses. Presence of 45,000 registered Indian companies and Nine Indian Banks (Bank of India, Indian Overseas Bank, UCO Bank, Indian Bank, Axis Bank, and State Bank of India, ICICI Bank and Bank of Baroda) speaks for the importance Singapore holds for India or vice-versa.
On FIIs front, the number of Singaporean companies registered with Security Exchange Board of India is 81. Similarly, on the cultural front, the Indo-Singapore has been real active countries as both the countries government have engaged into Memorandum of Understanding for cooperation in Arts, Archives and Heritage in 1993, followed by signing of many executive programmes, latest being signed in 2011 for the period 2011-14. Singapore in its role has been crucial in the role of reviving Nalanda University, which symbolises the historical linkages and an immutable example of Asian Cooperation.
Analyst says that Indian companies see a growing international business opportunities to be in Singapore especially using it as a platform to venture into the region and the world as they globalise.8 Their relation is a lesson to be learnt and practiced upon. Because the relationship between both the countries holds even greater potential, Ms Sushma Swaraj has outlined the '5s' vision to further promote engagement between both the countries. This requires scaling up of trade, speeding up connectivity, focusing on Urban development and water management for Smart Cities, development of skills and greater engagement with Indian States.
Scaling up trade and investment requires exploring the scope of venture capital for innovations and for cooperative projects in third countries. Improving connectivity requires Singaporean companies to look after connectivity and infrastructure projects of India such as Delhi- Mumbai Industrial Corridor (DMIC), the Chennai- Bangalore Industrial Corridor and the North East. Similarly, direct air-connectivity between Singapore and North East, particularly Guwahati, is required to be launched as North- East is the gateway to the ASEAN hinterland. In order to set up Smart Cities requires the flow of ideas and expertise on urban planning and water management from Singapore. The large Skill development requirement by India can be met by mushrooming up the similar centres of skill development in rest of the states of India as one which already exists in Delhi, set up by Singapore. Focusing on Indian states will provide for an immense opportunity of showcasing the cultural diversity of Indian States to Singapore. For instance the Asian Civilisation Museum is hosting a major Buddhist Art exhibition in Kolkata which will showcase our ancient Buddhist exchanges9 . For the 50th anniversary of the establishment of diplomatic relations between India and Singapore in 2014-15 commemorative events have also been planned including a festival of India in Singapore to facilitate the culture and people's interaction of both the countries.
Present boost to India-Singapore relations have contributed to interactions between the states of India and Singapore. The recent visit by Mamta Banerjee to Singapore has initiated the PPP model which has led to the signing of three major agreement and 13 MoUs. This was a major initiative taken to attract FDI in our country. Singapore-based GIC invested PE fund sponsored by HDFC property domiciled in that country and city-based Hiland group signed an agreement worth Rs 200 Crore in the Calcutta Riverside Development Project near the metropolis. Another agreement between Keventer Agro of Kolkata and InfraCo Asia, Singapore was signed for Food Park at Dakuni worth Rs. 1000 Crore. The third agreement was signed between Axsys Technologies and Compass Energy Pte Ltd of Singapore for collaboration on solutions in ship building and oil and gas exploration and is expected to generate employment of about 200 persons in the sector V-area immediately and oil and gas exploration. These agreement in itself are a milestone for Bengal and if enforced will make 'Biswa Bangla 'brand to resonate beyond our domestic borders.
Telangana Chief Minister K. Chandrasekhara Rao's visit to Singapore has also been a successful initiative -- a step in showcasing the new state whose CM has promised the best industrial policy, business-friendly environment and attractive incentives to attract investments from Singapore. This visit has been an eye opener for Mr Rao as it gave him an opportunity to get a hang of the social, economic and political developments in Singapore. Addressing a conference of IIMPACT, a body formed by alumni of Indian Institute of Management (IIM), he urged the investors to become partners in the vision of his government to make Telangana the best state in India. Promoting the strength of Hyderabad, Mr. Rao highlighted the presence of 3 lakh acres of government land which can be pushed for developing modern industrial park with quality infrastructure. On his list of priorities included industrial investments in core sectors like biotechnology and life sciences, IT hardware including bio medical devices, aerospace and defence sector, automobiles, chemicals and plastics, textiles, green technology, mineral based industries and transportation and logistics hubs.
To further deepen the interaction and to scale up the bilateral cooperation, Singapore's former minister Shanmugam will be visiting New Delhi, Hyderabad and Chennai to explore further opportunities in the businesses and investment arenas in India. His visit will be a turning point as it will lead to an interaction covering wide gamut of leaders of India, business leaders and senior representatives.
India and Singapore have achieved proficiency in establishing strong cultural and economic linkages and people to people movement amidst the presence of challenges. The countries interact both at country and state level setting an inspiration for other bilateral ties. Both the countries' efforts and strategic planning have brought the bilateral linkages between them to such a juncture that further opening up and adhering to the '5s plan' will enhance their partnership and make them achieve newer heights.
1. Richa Sekhani- Research assistant at Observer Research Foundation, ORF, New Delhi
2. http://www.siiaonline.org/scm/articles/succeeding_in_india_risks_and_rewards.pdf
3. Sen, R (2003). India-Singapore CECA: A good start to an enduring economic relationship. Retrieved from http://www.iseas.edu.sg/viewpoint/rsmay03.pdf
4. http://netindian.in/news/2014/08/16/00030157/swaraj-outlines-vision-build-india-singapore-ties-5s-plank
5. Latest Data Compiled By The Department Of Industrial Policy And Promotion
6. http://articles.economictimes.indiatimes.com/2014-08-15/news/52845975_1_indian-companies-indian-businessmen-singapore-firms
7. Singapore Department of Statistics, 2013
8. http://articles.economictimes.indiatimes.com/2014-08-15/news/52845975_1_indian-companies-indian-businessmen-singapore-firms
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