UDAIPUR (RAJASTHAN) - India holds many opportunities for Singapore and is increasingly open to foreign investment, said Prime Minister Lee Hsien Loong as he wrapped up his five-day working trip there today (Oct 6).

But there are still restrictions and Singapore hopes these can be eased, he added in an optimistic assessment of India's prospects, tempered by an acknowledgment of its continuing challenges.

India has a lot of potential, with its economy growing by 7.5 per cent a year, said PM Lee.

Politically, Prime Minister Narendra Modi - who came to power two years ago - is also pushing several reforms and setting a new direction for the South Asian giant that began its economic liberalisation drive in 1990.

Said PM Lee: "I am trying to bet on all the good horses. And India, it has had fits and starts, but if you compare it to where they were back in 1990...I think they have made a lot of progress.

"We still see many difficulties ahead. But we believe that there are opportunities and we would like to work on it with them," he added.

Singapore has been stepping up cooperation with India in a number of areas such as smart cities and skills training, and both countries upgraded their bilateral relationship to that of a Strategic Partnership last November.

This trip gives these projects an extra push, said PM Lee, who met Mr Modi and President Pranab Mukherjee in New Delhi earlier in the week.

Some projects in which both countries' interests are aligned have already come to fruition, he said.

For instance, Singapore has worked with India to open skills training centres, which are in demand in India following Mr Modi's pledged to train 400 million people by 2022.

PM Lee on Thursday opened the second such centre focused on tourism skills in the tourist city of Udaipur, Rajasthan, and a third skills training centre is being planned in the state of Assam in the north-east. The first training centre is in New Delhi.

Singapore was also the master planner for Amravati, the capital city of the state of Andhra Pradesh and one of the 100 smart cities Mr Modi wants to build. A consortium of Singapore companies is bidding to be the master developer of the project.

PM Lee welcomed these developments, adding that both countries were working on making progress in other areas.

The second review of the free trade pact between Singapore and India, known as the India-Singapore Comprehensive Economic Cooperation Agreement (Ceca), began in 2010 and has not concluded.

PM Lee said progress has been made on this front, particularly in resolving how Singapore financial institutions can operate in India and vice versa.

Other issues still need to be resolved and this takes time, he added saying Singapore hopes to close the second review soon.

Singapore also hopes to work towards the liberalisation of air services between both countries, he said.

"If you go to the provinces or states like Rajasthan, they are very keen on more air services because it means more tourism, more business for them," he added.

In an interview with The Hindu daily newspaper conducted on Wednesday, PM Lee acknowledged that India's complex system of rules and regulations at the state and federal levels could deter businessmen keen on expanding into the country.

"If you want to comply with all of them, you may find there's no possible solution," he said.

But he encouraged Singapore businesses to seize the opportunities, saying that cooperating with India brings substantial benefits even though they might not be immediately evident.

PM Lee said projects like the skills training centres build goodwill, a base level of which is needed for "other things to happen".

More directly, Singaporeans are already working and finding many opportunities in India, while Indian companies have also come to Singapore and created jobs for Singaporeans, he said.

PM Lee was also asked by The Hindu what animal best describes India, to which he replied: "I think the Indians consider themselves like an elephant.

"It moves not always the fastest, but inexorably."