Niggling issues in India- Singapore strategic and economic relations
The relationship between India and Singapore dates to the time when both countries were still relatively new. It is widely attributed to Sir Stamford Raffles, who established a trading station in 1819 in Singapore. In the year 2018 the Strategic Partnership agreement between India and Singapore was signed. It was strengthened by the visits of Prime Ministers of Singapore and India. The relations between India and Singapore are based on shared values, and broad interests. There is also a growing level of political engagement, which is regularly carried out through regular dialogues and exercises. Both countries are also members of various international forums. The comprehensive economic cooperation between India and Singapore has grown significantly over the years. There are a number of agreements that have been signed which provide a framework for various activities, including commercial and people to people exchanges.
Both India and Singapore have a comprehensive and longstanding partnership in the area of defence. This includes regular visits by the Indian Armed forces to Singapore, regular naval exercises, and ship visits from the Indian Navy. Both countries also have a number of defence ministers and senior officials. Prime Minister Narendra Modi announced the launch of a Trilateral Maritime exercise between India, Thailand, and Singapore during the 2018 Singapore International Conference on Science and Technology. This event would be conducted annually at an alternative location. In August 2019, Indian Navy's ship 'Sargadhwani' visited Singapore to promote scientific collaboration. Both India and Singapore share the same concerns about the threats posed by terrorism and extremism. As part of this, the two countries have worked on establishing a broad framework for security cooperation. Several rounds of the India-Singapore Security Dialogue have been held.
In 2014, the five areas of cooperation were agreed upon by the Prime Minister of India, Narendra Modi, during his first term. These included infrastructure development, trade & investment, smart cities & urban rejuvenation, and skill development. Foundation of economic cooperation is based on the India-Singapore CECA, a multi-lateral agreement that includes a free trade agreement in goods, an arrangement for promoting trade in services, and a new agreement that will avoid double taxation. The CECA includes various initiatives such as the establishment of mutual recognition agreements, liberalized visa rules, and the launch of e-commerce platforms. The duties and obligations of both countries are laid out in the Central European Commission Agreement. This document provides for dispute settlement and arbitration procedures. The first review of the Common European Commission Agreement was held on October 1, 2007. The review covered various issues such as expansion of tariff concessions, removal of non-tariff barriers, establishing of mutual recognition agreements, and enhancing IPR cooperation.
Singapore's favourable environment has encouraged Indian companies to establish their regional headquarters and manufacturing operations in the country. Strong air connectivity, vibrant Indian community, and the presence of several Indian companies in Singapore are some of the factors that have led to the significant growth of Indian corporate presence in the country. In November 2015, Prime Minister Narendra Modi visited Singapore. During his official visit, he invited Singapore companies to invest in India and make it easier to do business.
Controversies in Comprehensive Economic Cooperative Agreement (CECA):
The agreement was signed on June 29, 2005, by Prime Ministers Manmohan Singh of India and Lee Hsien Loong of Singapore. The objective of the agreement was to enhance the cooperation between India and China in various economic, trade, and investment arenas. It was signed to remove various barriers to investment between the two countries. This agreement had helped in attracting more professionals from the Indian Information Technology (IT) sector to Singapore. At present, around 9 per cent of Indians in Singapore are residing in the country. Due to the rapid growth of digital economy, there has been a massive pool of people looking for jobs in the tech industry.
In 2005, the number of Indians working in the sector has doubled. Over the last couple of months, the public in Singapore have voiced their opinions regarding the Free Trade Agreement (FTA) and the Central Election Commission Act (CECA). This issue reached the other social media platforms like WhatsApp and Facebook, where users would often post abusive and disturbing posts about Indian immigrants. Ong Ye Kung said that the PAP government has made the use of the CECA and FTAs as political scapegoats to undermine its policies. The Minister said that the free trade agreements (FTAs) between Singapore and India are not the cause of the challenges faced by PMEs in the country. He also noted that the trade is also triple the gross domestic product of Singapore. One of the reasons why Singapore has risen to prominence is its location. Tan See Leng explained that its reputation as a place where foreigners can come and work is one of the factors that contributed to its success. All employers must ensure that they follow the Fair Consideration Framework, which aims to avoid discriminatory hiring practices. One of the ways to ensure that Singapore's economy grows is by attracting foreign talent.
Over the years, many prominent Indians have served as presidents in the country. Then there was Alex Abisheganaden, who was described as the father of the guitar in Singapore. His daughter, Jacintha, is a well-known singer and actress in the country. There are also famous dancers like Santha Bhaskar and Usha Rani Maniam. In literature, there are also writers like M. Balakrishnan and Thamizhavel G. Sarangapani. Singapore is a country that is full of entrepreneurship, and Indians have made a huge contribution to the country's economy. Most of the people who make a difference in uplifting the economy are Indians. In the last few decades, many countries have embraced the idea of global village diplomacy, which encourages the mutual upliftment of one another.
Termination of Singapore- Andhra Pradesh Joint Project:
Singapore is India's largest trade partner in the Association of Southeast Asian Nations (Asean) in terms of overall trade in the last year. It is also the second largest investor in the country. The conclusion of the ASEAN-INDIA Free Trade Agreement in 2009 has strengthened our commercial ties with Singapore. As a result, many Indian companies are increasingly looking to raise funds in Singapore.
The Singapore-AP joint project to develop the new capital of Andhra Pradesh, known as Amaravati, has been terminated. The Andhra Pradesh government has decided to close the proposed Amaravati Capital City project based on its mutual consent with a Singapore consortium. Following the change in the scenario for the development of the Amaravati Capital City project, it is no longer feasible for the project to be developed as originally planned, said its developer, SAIH.
Due to various factors, the project, which was developed by the private firm Amaravati Development Partners, has been terminated. The new government of Andhra Pradesh, which came into power following an election, has decided not to establish a start-up area in the state. This comes as a blow to the region's budding start-up industry. Companies in Singapore are still interested in exploring opportunities in India's growing markets. Our economic agencies will help them get started. Singapore consortium companies that were involved in the project have stated that its closure did not affect their plans in India." The company noted that due to the delay in the project's approval, its costs for design services have been limited to a few million dollars. There was no subsidy or grant given to encourage investments in the state, he said. In 2014, the Andhra Pradesh government asked Singapore to help plan the new capital of the state. The move was made following N. Chandrababu Naidu's plan to build the new capital. Ascendas-Singbridge and Sembcorp Development were awarded joint venture opportunities to develop the city.
The World Bank suspended its support for a project in Andhra Pradesh after Mr N Chandrasekhar Rao's defeat in the state assembly election. The company noted that the termination of the project would not have a negative impact on its investment plans in India. The project closure of Sembcorp Industries' project will not have a material impact on the company's earnings per share and asset value per share for the financial year ended Dec 31, 2019. In September, Laurel Ostfield, a spokesperson for AIIB, had said that the bank is no longer considering the project for funding. Critics of the project claimed that the rates were fixed during the previous administration. However, Mr Reddy denied this claim and maintained that the rates were fixed during the previous government's rule.
Conclusion:
The two countries have resolved the various issues related to visa and banking restrictions. The review of the free trade agreement was concluded during Prime Minister Narendra Modi's visit to Singapore. The first review of the agreement was carried out in October 2007. One of the reasons for restricting the movement of skilled workers from India was due to the country's decision to place Indian companies under a watch list. Singapore did not allow Indian banks to have higher asset maintenance ratios than their foreign peers. This discrimination has caused many Indian banks to leave Singapore. A commerce ministry official said that Singapore has allowed State Bank of India and ICICI Bank to carry out their operations in the country. The official noted that the issue has been resolved. Singapore has put Indian companies under scrutiny for possible fair consideration, a government official said on Monday. Many of Indian companies that were on the watch list for possible foreign acquisitions have been taken off, according to Gagan Sabharwal, an official at Nasscom. These issues should not be talked about now, as the agreement clearly states that both sides will not put any restrictions on intra-corporate transfers. India wants to see a transparent framework for the third review of the Common European Climate Agreement (CECA). India and Singapore have also signed an agreement that will allow more Indian nurses to work in the country. On the eve of the third review of the Central Election Commission, which will be held in September, Union Minister for External Affairs Walid Khawar said that the country wants a permanent solution to the two issues. The second review of India-Singapore trade has been concluded, which included liberalizing the rules of origin and introducing new product specific rules. In the last fiscal, India exported goods worth $10 billion and imported goods worth $7 billion. The second review of the CECA has expanded the list of products that can be exempted from import duties in India. These new products include various food products and plastic components.It is still to be seen that whether Singapore accommodates India’s request for better trade in services or Singapore remains over cautious.
Pic Courtesy-Mike Enerio at unsplash.com
(The views expressed are those of the author and do not represent views of CESCUBE.)
