A Rich & Fulfilling Friendship enters a New Phase

Singapore 2015

As the Indian population settled down in the island nation, the commercial, social and cultural links between India and Singapore strengthened even further

India and Singapore share a rich history. The deep roots between the two countries date back to colonial times when the British founded and developed Singapore as an important gateway to service the Indo-China trade route. The two countries had similar administrative and economic structures as a legacy of the British rule. Economic opportunities resulted in Indian enterprises and traders setting up businesses in Singapore. Labour – both free and indentured – arrived from India. As the Indian population settled down in the island nation, the commercial, social and cultural links between the two countries strengthened even further.

With Singapore’s independence in 1965, there were high level visits between the two countries. Former Indian Prime Minister Indira Gandhi and former President V V Giri visited Singapore in 1966 and 1970 respectively. Then Prime Minister of Singapore Lee Kuan Yew visited India in 1966, 1970 and 1971.

A new relationship based on greater economic interaction began with the opening up of the Indian economy in 1991. Then Singapore Prime Minister Goh Chok Tong visited India in 1994 as the Chief Guest at the Republic Day celebrations. A reciprocal visit by former Prime Minister Narasimha Rao took place in September 1994. Continued high level interactions included the visits of former Prime Ministers A B Vajpayee and Dr Manmohan Singh to Singapore in 2002 and 2011 respectively. Singapore Prime Minister Lee Hsien Loong visited India in June 2005 and July 2012. Prime Minister Lee Hsien Loong also congratulated Prime Minister Narendra Modi on his election victory. In response, Prime Minister Modi hailed Singapore as a valued friend and expressed confidence that bilateral ties will become stronger. Presidential visits include those undertaken by former President K R Narayanan in November 2000 and former President A P J Abdul Kalam in February 2006 and the first ever visit by any Singapore President S R Nathan in January 2003.

India Looks East & Engages with Singapore

The 1980s and early 1990s saw Singapore, Malaysia and Indonesia emerging as economic powerhouses. The economic reforms of the 1900s saw the launch of India’s Look East Policy, aimed at increasing India’s economic interaction with South East Asian countries. With the Look East Policy and economic liberalisation, there was a convergence of interests between India and Singapore. Pragmatism rather than ideology was the basis for the new relationship as both the countries sought to widen and deepen their engagement with each other. Key agreements include the Comprehensive Economic Cooperation Agreement, CECA (2005), Double Taxation Avoidance Agreement, DTAA (1994), Bilateral Air Services Agreement (1968), Defence Cooperation Agreement (2003), MoU on Foreign Office Consultations (1994), and Mutual Legal Assistance Treaty (2005). The India-Singapore Strategic Dialogue, constituted in 2007, is meant to promote exchanges at Track-II level and is led by CII and the Institute of South Asian Studies (ISAS).

Economic Interaction: Investment & Trade

The foundation for strengthening of India’s economic ties with Singapore was laid in 2005 when both the countries signed the Comprehensive Economic Cooperation Agreement (CECA). The agreement led to a steady expansion in trade and investment. Singapore is India’s 10th largest trading partner in 2013-14 – and the largest trade and investment partner among ASEAN countries. The annual bilateral trade grew from $4.2 billion in 2003-04 to around $19.4 billion in 2013-14. Singapore was one of India’s largest foreign investors in 2013, while Singapore is one of India’s top investment destinations.

There is tremendous potential for greater economic cooperation as the government led by Prime Minister Narendra Modi sets a blistering pace of economic reforms and growth. For example, the Indian government has given top priority and emphasis to the creation of 100 smart cities in the country. Singapore companies have an enviable record in urban development solutions and have been enthusiastic about the opportunities that this opens up for them. Talks are on for a partnership between Singapore and Andhra Pradesh for the development of the state’s new capital. India’s endeavour to create a more stable and transparent regulatory environment has also created a positive environment for greater investment by Singapore. The city state’s interest in economic collaboration with India is defined by its decision to be a partner country at the 7th Vibrant Gujarat Summit held in January 2015.

Singapore’s enabling investment environment, its position as one of the leading global financial hubs, its focus on R&D, strong IP protection laws, its location advantage with access to a growing Asia-Pacific market and world class connectivity have resulted in Indian companies becoming the single largest foreign business community in Singapore.

The execution of Double Taxation Avoidance Agreement (DTAA) with Singapore with a Limit-of-Benefit (LoB) clause has led to a substantial increase in the FDI inflows. According to the FDI data for March 2014 of the Department of Industrial Policy and Promotion (DIPP) under the Union Ministry of Commerce Industry and Textiles, Singapore became the top source of FDI into India. India attracted $5.98 billion FDI from Singapore in 2013-14. The total FDI flows from Singapore accounted for about 25 percent of FDI inflows in 2013-14.

Infocomm and media, FMCG, pharmaceuticals and biotechnology are sectors where Indian investment flows in. Tata Communications, TCS, Mahindra Satyam/Tech Mahindra, Infosys, Wipro, Punj Lloyd, Quest Global and banks like Bank of India, Indian Overseas Bank, UCO Bank, Indian Bank, Axis Bank, and State Bank of India, ICICI, EXIM Bank and Bank of Baroda have a presence in Singapore.

Defence Interaction

Defence cooperation between India and Singapore is an important part of the relationship between the two countries. The first step in this direction was taken in 1994 when the two countries started joint annual naval training exercises, Singapore naval ships began training in Anti-Submarine Warfare (ASW) with the Indian Navy. Over the years, Singapore Indian Maritime Bilateral Exercise (SIMBEX) has grown in tactical and operational complexity to include Air Defence, Air and Surface Practice Firing, Maritime Security and Search and Rescue Operations. The 2014 edition of SIMBEX was conducted in the Andaman Sea in May 2014.

The annual Defence Policy Dialogue commenced between the two countries in 2004. Over the years, it has evolved into a platform for a candid exchange of views on security matters. The 9th Defence Policy Dialogue (DPD) was held in Singapore during September 2014. The Indian delegation was led by Defence Secretary R K Mathur, while the Singapore counterpart was headed by Permanent Secretary (Defence) Chan Yeng Kit.

Special agreements signed in 2007 and 2008 enable Singapore to use Indian military facilities to train its own small but high-tech armed forces. With land and airspace being a scarce commodity, this is vital for Singapore. India provides facilities for exercises of mechanised forces at Babina and artillery at Deolali ranges as well as for fighters at the Kalaikunda airbase in West Bengal. In November 2008, the two countries entered into another agreement, which allowed their infantry forces to undertake joint training exercises in India.

Academic Interaction

The signing of the CECA led to a broad based collaboration between India and Singapore in the academic arena. A series of MoUs were signed that have led to enhanced partnership between the two countries in technical as well as management education. The idea is to create a strong human resource base in both the countries. This is clearly mentioned in Articles 13.1, 13.2 and 13.3 of the CECA. To quote, the Agreement states, ‘the parties (India-Singapore) recognising the importance of education on sustainable economic growth, human resource, and social development, shall develop and promote mutually beneficial cooperation between the Parties, in the field of education.’ The agreement envisaged collaboration between Indian Institute of Technology and Indian Institute of Science, and various Singapore Universities. Also, the degrees specified by the University Grants Commission of India and awarded by an approved university or an institute deemed to be a university under the University Grants Commission (UGC) and similarly, degrees awarded by the universities in Singapore shall be recognised for the purpose of qualifying the holder to be considered for admission to universities of both the countries, states the CECA.

The MoUs signed between academic institutes in India and Singapore include: research collaborations in engineering and technology; student and faculty exchange; joint/dual undergraduate and dual post graduate degree programs; joint seminars; resource sharing; and finally human resource development.

Nanyang Technological University has tied up with the Confederation of Indian Industry (CII), a major Indian business group to collaborate in education, research and development, and technology transfer. Under the agreement, Nanyang Business School will customise executive programmes for corporate India.

Executive programmes have been made available to the confederation’s 6,300 members in Singapore and in different parts of India. And to provide a better understanding of the dynamics of India’s growth, the confederation also has programmes on doing business in India. The partnership is expected to boost internship opportunities in India for National Technical University (NTU) undergraduates as well.

The National University of Singapore (NUS) and NTU have entered into technical education and human resource development collaborations with various Indian institutes. In the area of technical education, the Indian Institute of Science, IIT Delhi, IIT Guwahati, IIT Madras, IIT Roorkee and Christian Medical College, Vellore have tied up with NUS. IIT Kanpur and IIT Mumbai have student/faculty exchange programs and research programs in association with NTU. Indian institutes that have non-technology collaborations with Singapore universities include: Indian Institute of Management, Ahmadabad; IIM Bangalore; IIM Calcutta; SandZ Management Academy; Indian School of Business; Symbiosis International; Amity Global Business School; Hyderabad University; Bharathiar University; Banaras Hindu University; and SRM University.

Cultural Interaction

Indians form the third largest ethnic group in Singapore and constitute 9.2 percent of the country’s population. Tamil is one of the four official languages of Singapore. Indian arts and dance form a part of Singapore’s cultural landscape with popular cultural societies such as Singapore Indian Fine Arts Society, Temple of Fine Arts, Chitrakala Arts, Charkula Arts Academy, Apsaras Arts, Soorya Singapore, Antara Foundation, Shrutilaya School of Dance, Mudra Arts, Sampada Dance Studio, Nrityalaya Aesthetics Society, Stroke Arts, Bharata Kalalaya and Kalamandir, to name a few, actively involved in teaching and promotion of various Indian arts and dance forms. Currently, Singapore is heading an international consortium to revive the ancient Nalanda University in Patna, India and will design, build and donate a library costing up to $7 million. Several cultural events have been hosted in both the countries as part of the celebrations for the 50th anniversary of the establishment of India-Singapore diplomatic relations.

The relationship between India and Singapore is a multifaceted and rich one that covers economic, social and security aspects. With both the countries placing a high value on ties, this friendship can be expected to become stronger and more fulfilling in the future.

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