SINGAPORE - Singapore and India will soon launch a third round of discussions to update a key bilateral economic pact and will consider expanding their air services agreement to cater to the growing demand for air connectivity.
After wide-ranging discussions at the Istana on Friday (June 1), Prime Minister Lee Hsien Loong and visiting Indian Prime Minister Narendra Modi said the two countries had agreed to deepen economic ties and build on longstanding defence cooperation.
Both leaders agreed to update the bilateral relationship to take advantage of new trends like digitalisation and financial technology, even as they announced the successful conclusion of the second review of the 2005 Comprehensive Economic Cooperation Agreement (Ceca), which serves as a foundation for economic ties.
Speaking at a joint press conference with Mr Modi, PM Lee said: "It shows that our economic ties are substantial and that we want to do more together."
Since the signing of Ceca, which provides tariff cuts for most of
Singapore's exports to India, bilateral trade has more than doubled to $25 billion. Singapore is now the second-largest investor in India with cumulative investments worth $36.3 billion.
Following up in his remarks, Mr Modi said both leaders had agreed that a third review of Ceca was a means to explore even greater opportunities thrown up by complementarities between India, the world's fastest-growing major economy, and Singapore, which has expertise in areas in demand in India, like smart cities, skills development and fintech.
"Our officials will soon begin discussions on upgrading and reforming this agreement," he added.
A joint statement issued after their meeting noted the importance of fintech as the new driver of the bilateral economic partnership. In his remarks, PM Lee said: "India is a significant market for Singapore fintech companies, while Singapore, which is a global fintech hub, can be a gateway for India to enter the South-east Asian market."
Both leaders also agreed to a possible expansion of their air services agreement, which was last retooled in 2013. PM Lee said: "We should start talking about a revised air services agreement because the traffic growth has been very strong."
Last year, over four million passengers travelled between the two countries. This year, traffic growth has continued unabated, rising another 14 per cent in the first quarter.
"An upgrade of this agreement will boost the business and tourism sectors, and bring our two peoples closer together," PM Lee said.
The press conference followed an exchange of memoranda of understanding in numerous fields, including cyber security, narcotics control and defence, an area in which both leaders noted ties had deepened.
"Our defence ties have strengthened, our navies have signed an agreement today on logistics cooperation. We will celebrate the 25th anniversary of the annual Singapore-India maritime bilateral exercise this year," noted Mr Lee.
Mr Modi stressed India's support for the centrality of Asean in tackling regional security issues and a rules-based order for peaceful settlement of disputes in his keynote address last night at the Shangri-La Dialogue before defence ministers, security experts and diplomats from across the Asia-Pacific.
Earlier on Friday, the Indian leader made a courtesy call on President Halimah Yacob after a welcome ceremony at the Istana, where he inspected a guard of honour.
Mr Modi's three-day official visit concludes on Saturday.