Trade and investment trends between India and Singapore

India and Singapore maintain strong ties under the India-Singapore Strategic Partnership. Singapore’s prominence as a major trading partner in Southeast Asia is a testament to the success of the Comprehensive Economic Cooperation Agreement (CECA) between the two countries. Furthermore, Singapore remains India’s major source of foreign direct investment, and its companies play an active role in urban planning and infrastructure development. This article examines general trade and investment trends between India and Singapore.

Singapore is an important economic partner for India and the India-Singapore Strategic Partnership strengthens bilateral ties. India is the largest trading partner in the ASEAN region and the eighth largest in the world. The Comprehensive Economic Cooperation Agreement (CECA), which entered into force in 2005, serves as the basis for economic engagement between the two countries.

Singapore has consistently been a major source of foreign direct investment (FDI) to India, contributing significantly to external commercial borrowing and foreign portfolio investment (FPI). In the July-September period of fiscal year 2024-25, Singapore accounted for 50% of India’s total FDI inflows, with FDI increasing by 43% to USD 13.6 billion. From April 2000 to March 2024, Singapore’s cumulative FDI contribution to India amounted to approximately USD 159.94 billion.

Singapore President Tharman Shanmugaratnam is scheduled to make a five-day official visit to India from January 14th to 18th, 2025, including a two-day visit from January 17th to 18th. This includes a visit to Odisha. This will be the first official visit by the President of Singapore to India in 10 years.

During Prime Minister Narendra Modi’s official visit to Singapore on September 4-5, 2024, the two countries signed four important agreements with a particular focus on the semiconductor sector. The semiconductor ecosystem partnership aims to strengthen India’s growing semiconductor industry and enhance market access for Singaporean companies. The visit also marked the beginning of the 60th anniversary of diplomatic relations between India and Singapore.

Framework for bilateral relations between India and Singapore

India-Singapore relations were elevated to Comprehensive Strategic Partnership in September 2024.

Over the past 60 years, India and Singapore have enjoyed a multifaceted bilateral relationship underpinned by shared values ​​and economic opportunities. The two countries have extensive political and defense ties, growing economic and technological cooperation, and vibrant cultural and people-to-people ties. Both countries are members of several forums, including the East Asia Summit, G20, Commonwealth of Nations, IORA (Indian Ocean Rim Association), and IONS (Indian Ocean Naval Symposium), reflecting their convergence on international issues.

To provide a larger framework for operations, the two countries have several agreements such as CECA, Double Taxation Avoidance Agreement, Bilateral Air Services Agreement, Defense Cooperation Agreement, Mutual Legal Assistance Treaty, and Mutual Recognition Agreement on Nursing. It has been concluded. . The Joint Ministerial Committee and the India-Singapore Ministerial Roundtable are among over 20 regular bilateral mechanisms, dialogues and exercises.

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The first meeting of the India-Singapore Ministerial Roundtable (ISMR) was held in New Delhi in September 2022 with the aim of taking bilateral relations to new heights. Discussions focused on existing and emerging areas of cooperation such as digital connectivity, fintech, green economy, green hydrogen, skills development and food security. The talks paved the way for further strengthening the strategic partnership between India and Singapore. During the visit, a Fintech Cooperation Agreement was signed between the Monetary Authority of Singapore (MAS) and the Gujarat International Financial Services Center Authority (IFSCA).

The second round of ISMR was held in Singapore on August 26, 2024. The conference reviewed the progress of the India-Singapore strategic partnership, focusing on the key pillars identified in the first ISMR, including digitization, skill development, sustainability, and healthcare and medicine. Ta. . Two additional pillars have been introduced to further strengthen bilateral cooperation: advanced manufacturing and connectivity.

Trends in India-Singapore trade relations

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The India-Singapore CECA played an important role in promoting bilateral trade, which expanded from USD 6.7 billion in FY 2005 to USD 35.61 billion in FY 2024. Bilateral trade between India and Singapore recorded an increase in exports of USD 14.41 in 2023-24. million people, an increase of 20.19% from the previous year. Bilateral trade in 2022-23 was worth USD 35.58 million, with exports increasing by 7.55% year-on-year to USD 11.99 million.

Singapore is India’s sixth largest trading partner (FY2024), accounting for 3.2% of India’s total trade. India is Singapore’s 12th largest trading partner, accounting for 2.3% of Singapore’s total trade. Singapore is India’s largest trading partner in the ASEAN region.

Trade trends between India and Singapore (Unit: million USD)

year

Export to Singapore

Imported from Singapore

2005

4000.6

2651.4

2006

5425.3

3353.8

2007

6053.8

5484.3

2008

7379.2

8122.6

2009

8444.9

7654.9

2010

7592.2

6454.6

2011

9825.4

7139.3

2012

16857.7

8600.3

2013

13,619.3

7,486.4

2014

12,510.5

6,762.5

2015

9,809.4

7,124.5

2016

7,719.81

7,308.38

2017

9,564.58

7,086.57

2018

10,202.82

7,466.99

2019

11,572.27

16,281.64

2020

8,922.66

14,746.78

2021

8,675.50

13,304.92

2022

11,150.61

18,962.19

2023

11,993

23,595

FY2024 14,414 people

21,199

Main export products from India to Singapore

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In FY24, India exported a total of 4,657 items to Singapore, generating export revenue of USD 14,414 million. The main items exported from India to Singapore are petroleum products, chemical residues and related products, ships, vessels and floating structures, accounting for US$9.407 billion of total export revenue, electrical machinery, equipment, metals and , followed by other precious metals. , organic chemicals, lead and lead-based products, and electronic equipment, accounting for US$2.471 billion.

In the first eight months of FY 2025 (April-November 2024), India’s exports to Singapore amounted to USD 9,404 million. The top exported goods during this period included petroleum products (US$ 3.318 billion), ships, boats and floating structures (US$ 1.651 billion), and electrical and mechanical equipment (US$ 1.111 billion). I was there.

Main imports from Singapore by India

In FY2024, India imported 3,760 items from Singapore with a total value of USD 21.2 billion. Electronic components, coal, coke, briquettes, computer hardware and peripherals accounted for the bulk of India’s import basket from Singapore, totaling USD 6,801 million, followed by ships, boats, floating structures and plastics. Raw materials, organic chemicals and petroleum products worth US$4.734 billion.

From April to November 2024, India’s total imports from Singapore were USD 13.91 billion. The top imported item was electronic components at US$1.999 billion, followed by coal, coke and briquettes at US$1.398 billion, and computer hardware and peripherals at US$1.328 billion.

Economic relations and investment opportunities between India and Singapore

In 2023-24, Singapore was India’s largest source of FDI, with capital inflows reaching USD 11,774 million. Cumulative FDI inflows from Singapore to India amounted to USD 167.47 billion (April 2000 to September 2024), accounting for 24% of India’s total FDI inflows.

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Key sectors in India that are attracting FDI capital from Singapore include the services sector, computer software and hardware, trading, telecommunications, pharmaceuticals, etc.

India’s cumulative foreign direct investment in Singapore reached USD 90,578 million from January 2008 to June 2024. Annual foreign direct investment in Singapore amounted to US$4.872 billion in FY2023-24, US$4.81 billion in FY2022-23, and US$7.18 billion in FY2020. twenty one.

Around 9,000 Indian companies are registered in Singapore, and prominent public sector, banks and trade organizations such as India Tourism Board, CII and FICCI have offices in Singapore.

Over 440 companies from Singapore are registered in India, as are two banks (Singapore Development Bank and United Overseas Bank), as well as trade and business facilitation agencies such as Enterprise Singapore, Economic Development Board and Singapore Tourism Board. We have an office in.

Tourism and connectivity in India and Singapore

India is one of Singapore’s top tourist markets, with Indian tourist arrivals exceeding 1 million in October 2024, two months ahead of the 2023 record. Singapore Tourism Board (STB) points out that India has grown by more than 12% to become Singapore’s third-largest tourist visitor. A market for tourists.

Singapore is well connected to India with 17 direct flights from major cities such as Mumbai, Delhi, Chennai and Bangalore, as well as tier 2 cities such as Kolkata, Bhubaneswar and Trivandrum. Most cities in India are close to Singapore as the flight time is between 3.5 and 5 hours. Approximately 280 flights per week ensure convenient and accessible travel between the two countries.

Singapore offers a streamlined visa process for Indian travelers, with visas typically issued within 3-5 business days through over 100 authorized agents. Multiple-entry visas are available, valid from 30 days up to one year.

Fintech and cross-border trade and finance

There is also growing cooperation between India and Singapore in the areas of technology, innovation, fintech and startups.

Key commercial and technical arrangements have been established to enable the acceptance of RuPay cards in Singapore. The collaboration between UPI and PayNow marks a significant milestone in cross-border fintech, with Singapore becoming the first country to launch a cross-border person-to-person (P2P) payment system with India. PayNow is Singapore’s fast payment system that enables peer-to-peer funds transfer services available to retail customers through participating banks and non-bank financial institutions (NFIs) in the country. This allows users to send and receive instant funds from one bank or e-wallet account in Singapore to another using just their mobile phone number, Singapore NRIC/FIN, or VPA.

Other notable efforts include connecting ONDC to Proxtera. This positions Proxtera as the first international buyer app linked to ONDC. GIFT Connect is a collaboration between the National Stock Exchange of India (NSE) and the Singapore Exchange (SGX) to create a unified liquidity pool for NIFTY products in GIFT City. TradeTrust facilitates interoperable electronic bills of lading (eBL) for seamless cross-border trade finance transactions.

skill development

India and Singapore are collaborating in setting up skill development centers across various sectors. With the support of public-private initiatives, skill centers are being developed in six Indian states of Himachal Pradesh, Delhi, Rajasthan (Udaipur), Assam (Guwahati), Odisha (Bhubaneswar) and Telangana (Hyderabad). Completed in places.

Two additional centers are currently underway in Madhya Pradesh (Bhopal) and Gujarat (Gandhinagar). During Prime Minister Modi’s visit to Singapore in September 2024, the two countries signed a memorandum of understanding on cooperation in education and skill development.