SINGAPORE - Singapore is a major partner for India in every area of priority - smart cities, aviation, skills development and others - in the second term of the Narendra Modi government, a visiting Indian minister said on Tuesday (Sept 10).
"As we embark on the next phase of this government, we look to the future with higher ambitions and new opportunities for India and the world to work together. Singapore will be among our foremost partners," said Mr Hardeep Singh Puri, India's Minister of State for Housing, Urban Affairs, Civil Aviation and Commerce and Industry.
He was speaking at the India Singapore Business Summit organised by the Indian High Commission to mark 100 days of Mr Modi's second stint as Prime Minister after his re-election in May.
Linkages between the two nations are mushrooming, with Singapore becoming India's top foreign investor in the first quarter of 2019. It is a major source of India's foreign portfolio investments as well as external commercial borrowings. A majority of rupee-denominated bonds are listed on Singapore Exchange.
At the other end, around 20 per cent of foreign investment flowing out of India comes to Singapore. Nearly 9,000 Indian companies have a presence in the city state, forming the largest overseas contingent of firms registered in Singapore.
India is also the third-largest source of tourists to Singapore, with arrivals growing at 10-15 per cent a year. A total of 18 Indian cities are connected to Singapore through over 500 weekly flights.
"For India, Singapore has been over the past three decades the political, economic and intellectual bridge to South-east Asia. And it remains an important gateway to the world for a globalising India," Mr Puri said.
The rapid pace of urbanisation, new tax reforms and ease of doing business make India, which is looking to double its economy to US$5 trillion ($6.9 trillion) by 2024, an attractive place for investors, he said. Mr Modi's emphasis on digitisation has opened up more opportunities in what is today the land of "a billion bank accounts, a billion mobile connections and more than a billion digital identities".
"In every area of our development priority - urban solutions, smart cities, infrastructure, skills development, aviation, to name a few - Singapore is a major partner," he said.
OPENING UP HAS PAID OFF FOR INDIA, SAYS CHEE HONG TAT
In his speech at the summit, Singapore's Senior Minister of State for Trade and Industry and Education, Mr Chee Hong Tat, noted that the two nations worked well together because they had complementary strengths.
But with globalisation and international connectivity under retreat, he said: "We cannot assume our economic ties will remain the same as before if we simply continue business-as-usual.
"It is like rowing a boat in rapid waters, if we do not row harder and move forward, we will be swept back by the fast currents."
Weighing in on the discussion about India's hesitation in joining the Regional Comprehensive Economic Parnership (RCEP), he said opening up had paid off for India in the past and might lend wings to its next phase of growth.
The proposed mega trade deal under negotiation between Asean and its six trading partners India, China, Japan, South Korea, Australia and New Zealand, will cover 40 per cent of the world's trade flows. Indian policymakers, however, appear unconvinced about its merits.
On Monday, Foreign Minister Subrahmanyam Jaishankar outlined India's reservations about the deal, flagging a major concern that the country would find itself flooded with cheaper Chinese goods once it lowers trade barriers as it joins RCEP. This might put local manufacturers at a disadvantage in their home turf.
On the other hand, he said, China's policies remain protectionist, with poor access for Indian companies. Additionally, RCEP does not sufficiently safeguard the interests of India's service industries, he said.
Mr Chee said fears about the impact on companies and workers were also in the air when India undertook extensive economic reforms under former prime minister P. V. Narasimha Rao in 1991.
But it was a right decision to open up and connect with the world, he said. India's GDP grew almost nine times from 1991 to 2016, lifting many millions out of poverty.
"I think it is timely for India to take further steps now to open up further and integrate more closely with other economies in the region," Mr Chee added. "This will be essential for the next phase of India's growth and development."
Singapore's stance, since the start of the RCEP negotiations in 2013, has been that the pact must include India, given its economic potential.
Mr Chee said: "We want India to be part of RCEP. Besides the economic benefits, we believe this will further strengthen the links between India and Asean, which is important for having a balance of power that promotes peace and stability in this region."
Mr Puri said India shared Asean's strategic and economic vision for RCEP and wanted to see a comprehensive, fair, and balanced agreement.
"The choice we will make will finally depend on our balance of economic and strategic interests that we see coming out of the negotiations," he said.
Describing RCEP as the most important trade deal on the horizon, Mr Chee said: "We hope that it can be concluded soon with India as part of this historic agreement. There is a window to do so within the next few months, and we should strike when the iron is hot."