India has put on hold a review of the Comprehensive Economic Cooperation Agreement (Ceca) in response to cutbacks in visa approvals for Indian software professionals bound for Singapore, according to a report in the Times of India newspaper.
Ceca is a free trade pact with Singapore and the review is meant to look at areas where the agreement could possibly be expanded.
The Times of India, quoting unnamed sources, said the government feels Singapore violated the pact by restricting the movement of software professionals. The Indian Ministry of Commerce did not respond to queries from The Straits Times on whether the agreement had been put on hold by India.
But the National Association of Software and Services Companies (Nasscom) said the movement of Indian software professionals to Singapore started going down from January last year, and maintained it was becoming difficult for Indian software firms to operate here.
"It has been reduced to an insignificant trickle for all practical purposes... It is not just the new visas but just any kind of visas affecting the existing workforce," Nasscom president R. Chandrashekhar said.
He estimated the number of Indian software workers in Singapore to be less than 10,000.
"Some companies have actually started looking at relocating elsewhere because Singapore is not turning out to be a viable springboard for the Asean region," he said.
Mr Chandrashekhar, who said he could not name companies, also said Indian software firms had received fair consideration letters from the Singapore Government.
According to the Ministry of Manpower, under the Fair Consideration Framework, all companies in Singapore must comply with the Tripartite Guidelines on Fair Employment Practices and have systems that are open, merit-based and non-discriminatory.
The Ceca was first signed in 2005 and was the first such deal that India has signed with any nation. The agreement gave Singapore an early mover trade advantage over other countries, with bilateral trade increasing from $16.6 billion in 2005 to $25.5 billion in 2013.
The pact covers tariff concessions, merchandise trade, trade in services and investments.
But the review of the Ceca to update the terms has been under negotiation for more than six years, with India seeking more access for professionals and banks.
Sources told the Times of India that the Singapore authorities were insisting on an "economic needs test" (ENT), which requires compliance with certain economic criteria, to deny access to Indian professionals. "They are doing it despite the Ceca clearly stating that there will be no ENT or quotas on agreed services. This is a violation of the agreement," an Indian officer, who did not wish to be identified, was quoted by the Times of India as saying.
Some warned that the Ceca review had the potential to adversely impact otherwise good relations.
"The Ceca review is extremely important. The fact that it is stuck for so many years is likely to be counterproductive in bilateral relations," said Dr Sachin Chaturvedi, director-general at the Research and Information System for Developing Countries, a New Delhi-based autonomous think-tank.