India and Singapore’s relationship is like a zen yoga pose, firmly grounded in history yet always reaching for the next big stretch. This relationship or rather this friendship, proves that the firmest of alliances are built not just on history, but also on a mutual passion for progress and a healthy dose of pragmatism. The modern relationship is attributed to Sir Stamford Raffles who, in 1819, established a trading station in Singapore on the route of the Straits of Malacca. This station later became a crown colony governed from Kolkata till 1867. With a history of strong commercial, cultural, and people-to-people ties between India and Singapore spanning over a thousand years, it is no surprise that Tamil holds an official place in Singapore’s multicultural fabric!
The Lion City enjoys broad-based and multifaceted bilateral relations with India, underpinned by the India-Singapore Strategic Partnership signed in November 2015 during Indian Prime Minister Narendra Modi’s official visit to Singapore. As Asia’s powerhouses, the two nations have been teaming up in everything from fintech and semiconductors to skill development and dispute resolution, basically nailing innovation and hammering out solutions too. Together, they’re not just keeping up with the global trends, they’re carving out a fast track straight into the future. Now, after over a decade, this enduring partnership is set to reach new heights with the much-anticipated state visit of Singapore’s President Tharman Shanmugaratnam to India commencing today, i.e., January 15, marking a significant milepost in the 60th year of diplomatic ties between the two nations.
India and Singapore’s partnership, grounded in a mutual past, has evolved and diversified, with growing cooperation across multiple domains. Singapore is Indiaʼs largest trade partner in the Association of Southeast Asian Nations (ASEAN). It is the leading source of Foreign Direct Investments (FDI), among the largest sources of External Commercial Borrowings, and a major source of Foreign Portfolio Investment. Bilateral trade expanded after the conclusion of the Comprehensive Economic Cooperation Agreement (CECA) from USD 6.7 billion in FY 2004-05 to USD 35.6 billion in 2023-24. In the FY 2023-24 Singapore ranked as Indiaʼs 6th largest trade partner, accounting for 3.2% of Indiaʼs overall trade. India’s imports from Singapore in FY 23-24 amounted to USD 21.2 billion (decline of 10.2% compared to the previous year), and exports to Singapore added up to USD 14.4 billion (growth of 20.2 % compared to the previous year).
FDI equity inflows into India from Singapore during 2023-24 stood at USD 11.774 billion. The cumulative FDI inflows from Singapore to India stood at USD 159.943 billion (April 2000– March 2024) which is 24% of total FDI inflows in India. The cumulative outward Indian FDI to Singapore stood at USD 90.578 billion (January 2008–June 2024). The outward Indian FDI to Singapore stands at USD 4.872 billion (FY 2023-24), USD 4.81 billion (FY 2022-23) and USD 7.18 billion in 2020-21. Singapore’s FDI equity is zeroing in on these top contenders: Computer Software & Hardware, Trading, Telecommunications, Services, and Pharmaceuticals, looks like they’ve got the Midas touch!
Did you know? About 9000 Indian companies are already making their mark in Singapore, including six PSUs, nine banks, Confederation of Indian Industry (CII) , Federation of Indian Chambers of Commerce and Industry (FICCI) , which have their offices in Singapore. On the flip side, more than 440 companies from Singapore are registered in India, along with two Singapore banks (the Development Bank of Singapore and the United Overseas Bank), Enterprise Singapore (ES), the Economic Development Board (EDB) and the Singapore Tourism Board, all of which have their offices in India. On top of that, during the PM’s visit to Singapore in September 2024, it was announced that Invest India will open an office in Singapore to facilitate investments from the city-state. Shortly after, Commerce and Industry Minister Piyush Goyal inaugurated the Invest India office in Singapore. Quite the buzzing business exchange, wouldn’t you say?
With all the game-changing innovations and power-packed agreements between India and Singapore, ensuring smooth operations is non-negotiable. That’s where the dispute resolution mechanisms step in, like the ultimate referee. By leveraging Singapore’s expertise in arbitration and India’s growing prominence as a global business hub, dispute resolution received a powerful boost with India and Singapore signing a landmark Memorandum of Understanding (MoU) to ramp up cooperation in the field of Law & Dispute Resolution. The MoU aims to streamline dispute resolution mechanisms, fostering greater confidence among investors and businesses operating between the two nations. From international commercial dispute resolution to promoting alternative dispute mechanisms, this MoU aims to create synergy between the two countries’ legal systems. To top it off, the establishment of a Joint Consultative Committee will ensure smooth implementation. In his virtual speech, Arjun Ram Meghwal, Union Minister of State (MoS) [Independent Charge (I/C)] for Law and Justice, highlighted that the partnership is all about sharing best practices, exchanging expertise, and building capacity to meet the evolving legal needs of businesses and citizens. It’s a dynamic, forward-thinking legal alliance designed to harness the best of both worlds!
Returning to the President’s visit to India, forget the usual, this time it’s all about cutting-edge cooperation, with a focus on non-traditional areas such as semiconductors, energy, industrial parks, and skills. Two pacts related to semiconductors and skill development are likely to be in the loop. During his trip, the President is likely to visit New Delhi and Odisha. In New Delhi, he will hold meetings with President Droupadi Murmu and PM Modi. Additionally, he is expected to engage with the External Affairs Minister Dr. S. Jaishankar, Finance Minister Nirmala Sitharaman, Road Transport Minister Nitin Gadkari, Health Minister J.P. Nadda, Commerce Minister Piyush Goyal, Information and Broadcasting Minister Ashwini Vaishnav and MoS (I/C) for Skill Development Jayant Chaudhary. Apart from meeting these Indian leaders, the President will also meet senior economists and academics as well as senior NITI Aayog officials.
In unison, southern states particularly Karnataka and Tamil Nadu have been main attractions for investments from Singapore. However, Singapore is looking to diversify its investments into new states, with Odisha being a key focus area. In December 2024, Singapore’s High Commissioner to India, Simon Wong, revealed President Shanmugaratnam’s upcoming visit to Odisha during a meeting with Odisha Chief Minister Mohan Charan Majhi. High Commissioner Wong also emphasised the state’s potential investment areas such as petrochemicals, green energy, and skill development, noting that several bilateral agreements in these areas can also be in the works. President Shanmugaratnam will travel to Bhubaneshwar, where he will hold talks with CM Mohan Charan Majhi. As the first country partner of Utkarsh Odisha-Make in Odisha (MIO) Conclave, 2025 which is going to be an all-encompassing platform to tap into the state’s vast investment prospects, this visit presumes significance. The Singaporean leader is also likely to pay a visit to the famous Konark Temple.
Let us now shift gears to skills! Gan Kim Yong, the Deputy Prime Minister and Minister for Trade and Industry of Singapore, shared a nugget of wisdom at the grand kickoff of the Singapore-India Hackathon in 2023 underlining the importance of skill development: “India, through programmes such as Skill India, is capitalising on its demographic dividend. Like India, Singapore also invests heavily in adult learning and upskilling”. When it comes to skill development, India and Singapore are in sync! Through various plans and MoUs the commitment is quite evident. Recent years have seen the successful completion of skill centre projects. With public and private support, India has completed skill centre projects at six locations (Himachal Pradesh, Delhi, Rajasthan (Udaipur), Assam (Guwahati), Odisha (Bhubaneshwar) and Telangana (Hyderabad)) and two projects [Madhya Pradesh (Bhopal) and Gujarat (Gandhinagar)] are ongoing. In September 2024, PM Modi undertook an official visit to Singapore and met with his Singaporean counterpart Lawrence Wong. The two leaders praised the initiatives that facilitated the placement of Indian interns in Singapore through the ITE Education Service’s Singapore Internship Programme in collaboration with Odisha’s World Skill Center, as well as the Singaporean interns participating in the CII-Enterprise Singapore India Ready Talent Programme. In the midst of the Singaporean President’s itinerary, he is likely to visit the World Skill Center backed by Singapore’s Institute of Technical Education Services with funds from Asian Development Bank (ADB). A brilliant example of how both nations are focused on investing in their greatest asset-people!
Another pact under discussion is skilling in semiconductors in Odisha, as both the sides envision to step up economic ties and air connectivity. The agreement will help India garner Singapore’s support in the sectors of semiconductor fundamentals, processes, packaging, and testing. In September 2024, the two nations unveiled about half a dozen agreements, including a significant one aimed at establishing a semiconductor ecosystem. This MoU on semiconductors envisages cooperation in semiconductor cluster development, talent cultivation, and advanced manufacturing, particularly developing resilient supply chains. Although Singapore lacks its own semiconductor manufacturing giants, it has built up a robust and diverse ecosystem of equipment firms and material suppliers, as well as research and development and manufacturing activities throughout the value chain, including integrated circuit design, wafer fabrication, and testing. Singapore’s semiconductor industry accounts for 10% of all chips and 20% of semiconductor manufacturing equipment produced globally. Therefore, this MoU will enable India to benefit from Singapore’s ecosystem.
In this whirlwind of a global landscape, the focus on human potential, through initiatives like skill development is more important than ever. The partnerships in Odisha and beyond are not just building factories or tech hubs, they’re building the very foundation of knowledge and expertise. The next step? The further nurturing of these relationships, because as the saying goes, Rome wasn’t built in a day, and neither will a global semiconductor superpower. But with the right skillsets, right pacts, and right intentions, the future of India-Singapore cooperation is bound to be both prosperous and groundbreaking!