Prime Minister Lee Hsien Loong yesterday urged India to join Asean in a push to create the Regional Comprehensive Economic Partnership (RCEP) - the world's largest free trade area - next year.
"I am glad that we have made tremendous progress this year to advance the RCEP negotiations. We are now close to the finishing line, although further work remains to finalise the remaining details," PM Lee said during an informal Asean-India summit over breakfast with Indian Prime Minister Narendra Modi.
The RCEP yokes the 10-member Asean grouping and its six key trading partners - China, Japan, South Korea, India, Australia and New Zealand - with a combined GDP of about US$25 trillion (S$34.4 trillion), exceeding that of the United States. The pact is seen as vital to securing the region's continued prosperity, especially in view of ongoing US-China trade tensions.
In a tweet after the meeting, Mr Modi said: "Cementing old bonds in pursuit of a glorious future. Had a great interaction with Asean leaders at the Asean-India Informal Breakfast Summit. We are happy that ties with Asean are strong and are contributing to a peaceful and prosperous planet."
India has been somewhat hesitant in joining the RCEP, unwilling to cut tariffs and open its market wider in the face of strong opposition from its farm sector and domestic industries like steel and textiles.
The negotiations come at a sensitive time for Mr Modi, who is seeking re-election next year.
India is especially guarded as the pact includes China, its key trading partner as well as competitor. India also wants the RCEP to include the service sector and allow improved access for its professionals.
Pointing to the trade potential that remains to be unlocked, PM Lee said: "We should make the full effort to bring the RCEP negotiations to conclusion in 2019.
"Together with the Asean-India Free Trade Area, we hope that this will help us reach the Asean-India trade target of US$200 billion in total trade by 2022."
The Asean-India FTA was signed in 2010. Bilateral trade has grown to around US$80 billion, but is seen as far short of its true potential. Asean nations are increasingly investing in India, including in ports, highways, townships and food processing sectors, with the Modi government improving ease of doing business.
PM Lee also called for better maritime, air, land and digital connectivity between Asean and India, noting the progress made on the India-Myanmar-Thailand trilateral highway with an extension to Laos, Cambodia and Vietnam.
"Enhancing air links will certainly strengthen businesses and people-to-people linkages and... help both Indian and Asean carriers tap new and emerging markets," he added.
Under Mr Modi's Act East policy, India's profile in South-east Asia has been on the rise. PM Lee noted that India has consistently supported Asean centrality, including in a speech Mr Modi made in June at the Shangri-La Dialogue here, where he expanded on his vision for the Indo-Pacific at a time when the region feels the heat from the US-China rivalry.
"This period of geopolitical uncertainty gives new impetus for Asean and like-minded partners like India to deepen our cooperation," PM Lee said.
Mr Modi last met Asean leaders in January at a commemorative summit in New Delhi to mark the 25th anniversary of Asean-India ties. The leaders were also the chief guests at India's Republic Day parade.
"Asean and India must continue to enhance our strategic partnership," PM Lee said, noting that Singapore has always been a strong advocate for India's inclusion in the Asean community.