Indian Express | 3 December 2007
Singapore emerging as India Inc’s gateway to the world
NEW DELHI, DECEMBER 2: With more than 2,700 Indian firms operating in the country, Singapore has emerged as the favourite destination for domestic corporates looking to internationalise. While bilateral trade between the two nations has gone up as expected post-Comprehensive Economic Cooperation Agreement (CECA) in 2005, it is Singapore’s might as a leading hub for innovation and R&D that has attracted companies to set up shop there.
“Singapore is increasingly being used as a platform for Indian companies looking to internationalise their business, with the number of Indian companies venturing there growing at an annual rate of about 10 per cent,” said International Singapore Economic Development Board Director (Asia Pacific) Aylwin Tan. “The number has more than doubled in just five years from 1,100 in 2001 to more than 2,800 companies as of Q3 2007, making India the fourth largest contingent of foreign companies in the city nation.”
Not surprisingly, most of the companies that have invested there are either Information Technology (IT) companies or manufacturing firms largely dependent on technology and the house of Tata’s have taken a lead in that.
Some of the prominent companies that have invested there include Tata Consultancy Services (TCS), Tata Steel, Tata Precision (TPI), Satyam Computers, NIIT Technologies, Tech Mahindra and Godrej.
“We invested in Singapore with TPI three decades ago and there has been widespread changes in the country since then. It’s an unparallel success story and has emerged as a country that is both progressive and prosperous, with strong international trade links and a per capita GDP equal to leading western European nations,” said Tata International chairman Shyamal Gupta.
The surge in bilateral trade and the fact that India-Singapore is the first and so far the only fully operational CECA has helped increase investor confidence. Bilateral trade has tripled in the past five years from $6.9 billion (Rs 186 billion) in 2001 to $19.9 billion (Rs 537 billion) in 2006.
India has emerged as the fastest-growing trading partner for Singapore and is now its 12th largest trading partner. Singapore was India’s 3rd largest export destination and 4th largest investor in 2006, with cumulative investments of $1.56 billion (Rs 61 billion) since August 1991. In 2006 alone, Singapore’s total investments amounted to $620 million (Rs 24,462 million), comprising 5.6 per cent of all FDI into India.
Singapore’s free trade agreements (FTAs) with other countries is an added bonus. The US, Japan, Australia and South Korea are among the 13 countries it has FTAs with and another is being negotiated with China.
“For four decades, Singapore has been the gateway for international companies, especially those from the US, Europe and Japan to venture into Asia. Now it is playing that role also for Asian companies internationalising. As a result, more than 12,000 US, European and Japanese companies, and more than 14,000 from India, China, the ASEAN, Australia, etc are here. They represent interests and opportunities from all corners of the world,” Tan said.
Cashing in on city nation’s R&D and innovation opportunities
• The total trade between India and Singapore was worth $19.9 billion in the year 2006
• The figure is growing by 19.9% per annum
• According to the EXIM bank,Singapore is one of the top four countries that Indian companies use as an internationalising platform
• Indian foreign enterprises currently form the fourth largest group in Singapore after those from Malaysia, the USA and Japan Post-CECA, imports from India into Singapore are duty-free
• There is freer movement of people due to mutual recognition agreements
• Apart from semi-conductors and computer peripherals, Singapore is emerging as a petrochemicals hub
• Twenty per cent of global oil trade originates in Singapore
• Over 1,700 Indian companies have set up base in Singapore
• More companies are keen to enter while the existing ones are expanding operations