Indian budget 'offers opportunities' for Singapore businesses

Singapore will continue to be a top investor in India as the South Asian country makes a big push for infrastructure in its recently announced budget, according to its High Commissioner in Singapore, Mr P. Kumaran.

"Singapore in the last two years has been at the top in terms of investments flowing into India. I expect the trend to continue," he said.

He was responding to a question on how investments from Singapore would be impacted during a webinar on the budget organised by Dhruva Advisors Singapore, a tax advisory firm, the Indian High Commission and the Federation of Indian Chambers of Commerce and Industry.

"Given the huge manufacturing opportunities and infrastructure building opportunities... I see more investments from Singapore," said Mr Kumaran.

Finance Minister Nirmala Sitharaman, who presented the budget on Feb 1, announced a 35.4 per cent increase over the past year on the government's overall capital expenditure target, bringing it to 7.5 trillion rupees (S$134 billion).

The spending plans include the building of 25,000km of new highways and 100 new cargo terminals in three years.

The minister also announced that the government would issue sovereign green bonds as part of its overall market borrowing in the next financial year, beginning in April, for climate-friendly infrastructure.

A green bond is a fixed-income instrument aimed at mitigating the impact of climate change by supporting environmental projects.

Singapore has identified climate finance as an area of growth for the Republic and is looking at initiatives to expand its green finance ecosystem.

"We are looking at green bonds. Singapore normally is at the leading edge of any such initiative where financing sources are sought," said Mr Kumaran.

Mr Harshavardhan Neotia, chairman of the Ambuja Neotia Group, said the issuance of sovereign green bonds showed India was taking a step towards a decarbonising economy.

Singapore and India have close political and economic ties, with the Republic helping India forge close links with Asean. Trade ties have deepened since the two countries signed the Comprehensive Economic Cooperation Agreement.

Singapore, in recent years, has been the largest source of foreign direct investments (FDIs) in India, with cumulative investment inflows totalling US$120 billion (S$162 billion) for the past 20 years. FDIs from Singapore for the 2020-2021 financial year came to US$17.4 billion, the largest source for India that year.

Mr K. V. Rao, resident director for Asean at Tata Sons, told the webinar there were opportunities for Singapore companies in infrastructure, including digital infrastructure, ports, airports, malls and urban planning. He singled out education as a new area of interest for Singapore.

"You have a plateful of opportunities to pick and chose from," said Mr Rao.