The Hindu Business Line : ‘India-Singapore trade linkages must grow’

Recently in Singapore Even though the Singapore-India bilateral trade has almost doubled in three years from S$13 million to nearly S$24 million in 2007, “I always tell Mr Kamal Nath that we should compare Singapore’s trade with China, which is much bigger. We believe that India should move from the No. 11 spot to become one of our top five trading partners,” says the Singapore Minister for Trade and Industry, Mr Lim Hng Kiang.

In an interaction with a group of Indian journalists invited by the Singapore government, he outlined the success in economic co-operation between the two countries after the signing of CECA (Comprehensive Economic Co-operation Agreement) in 2005. Singapore’s largest trading partner is Malaysia followed by the EU and China. Singapore continues to be among the top four investors for India; “the numbers don’t really reflect the reality as some of the investment goes through Mauritius.”

Investment trail

Indian investments in Singapore were growing, “but not as significantly as we would like,” said Mr Lim; 3,000 Indian companies are registered in Singapore against 2,005 Chinese companies. Many Indian companies started their operations in Singapore by putting up trading, representative offices.

Once they become comfortable with the environment and the services, they put up projects. “They come to Singapore because they require a certain confluence; we can’t offer cheaper land or cheaper wages. What we can put on the table are confluence of international linkages and talent. Bilcare Research (in pharma packaging) is one such company.”

Even Chinese companies that are looking at “aggressively internationalising their operations find Singapore a convenient and comfortable place,” he added.

Mr Lim said that for Singapore, China was always the benchmark when it came to expanding economic co-operation with India. “Our economic links with China are extremely broad and something we want to achieve with India. India is such a huge country, and our co-operation should be in different sectors, localities, States. In China, our co-operation with respective provinces is broad and deep, and we are trying to do the same with India. We have met with moderate success in States like Tamil Nadu and Kerala.”

Because India was “such a huge country”, the Singapore government was urging all the ministries to work with the chief ministers of States to explore economic opportunities at the regional levels and had met with “moderate success” in this goal.

So how had perception about business opportunities in India changed in Singapore over the last few years? “We recognised the potential of India in 1991; though the watershed was CECA giving the institutional framework and boosting the confidence of the business community.” But, added the Minister, what he found even more remarkable in the last couple of years was the interest displayed by the international business community in Singapore to use CECA as a platform to do business in India. As CECA covered all the companies operating out of Singapore, it was proving to be a convenient platform, particularly for Japanese companies to trade with India.

Mr Lim added that often “CII people who want to link up with Japan tell me that they go all the way to Japan and find the mindset still insular. But the mindset of the Japanese managers based here is more cosmopolitan, more multinational. I’d like to say we have the systems, the brand, the reputation, the linkages and professionalism.”

He said that with only 36,000 babies being born in Singapore every year and a negative growth rate “we need more bodies” and hence international professionals were always welcome. But as land was one of its biggest constraints, every 5 or 10 years “an intellectual exercise” was done by the country’s policy makers to decide on what kind of population and economy would be best in its long term interest. In a population of 4.5 million, indigenous Singaporeans were 3.4 million. But with a negative growth rate, this number was bound to go down to 3.3 million or even 3.2 million.

When asked to comment on the Civil Aviation Authority of Singapore failing to make much headway in its effort to provide airport-related services in India, the Minister said, “I think we have met with some modest success in providing some services; but then in such things you need patience and stamina.”

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