India - Singapore Bilateral Trade & Investment

Singapore is among India's largest trade and investment partner in ASEAN and accounted for 27.3 % of our overall trade with ASEAN in 2021-22. Singapore is the leading source of Foreign Direct Investment into India. Over the last 20 years the total investment into India from Singapore is almost 136.653 billion and accounts for nearly 23 percent of the total FDI inflows.

Our economic and commercial ties have expanded significantly in recent years, particularly after the conclusion of the Comprehensive Economic Cooperation Agreement (CECA) in 2005. In addition to that, conclusion of ASEAN-INDIA Free Trade Agreement (AIFTA) in Trades in Goods (TIG) in 2009 also help in boosting our economic and commercial ties with Singapore. Indian companies are increasingly using Singapore for raising funds, particularly for global operations. For public sector units opting for disinvestment through IPO/FPO, Singapore is an attractive destination for pre market discussion as well as road shows during IPO/FPO. Nine Indian banks operate in the country - Bank of India, Indian Overseas Bank, UCO Bank, Indian Bank, Axis Bank, State Bank of India, ICICI, EXIM Bank and Bank of Baroda. SBI and ICICI have been granted Qualifying Full Bank (QFB) status with retail operations.

The India-Singapore CECA has four key components: a free trade agreement (FTA) in goods; an arrangement for boosting trade in services, including financial services; a package to promote investment flows and provide mutual investment protection; and a new agreement for avoiding double taxation. It also includes Mutual Recognition Agreements on quality certification of goods and services, liberalized visa rules for professionals, and undertakings to cooperate on several sectors like Customs, dispute settlement, intellectual property rights, education and e-commerce.  The CECA also resulted in the signing of a protocol amending the DTAA. Laying out the duties and obligations of the two countries in the above fields, CECA also provides for dispute settlement procedures and recourse to arbitration in certain contingencies. Annexes to the CECA set out detailed information including a list of products for tariff reduction/elimination, certification and testing as well schedules on specific commitments.

Composed of 16 Chapters, the major issues dealt with by CECA include trade in goods (Chapter 2), rules of origin issues (Chapter 3), customs cooperation (Chapter 4), mutual recognition agreements on standards and technical regulations, sanitary and phyto-sanitary measures (Chapter 5), investment protection (Chapter 6), trade in services and movement of professionals (Chapter 7), air services (Chapter 8), movement of natural persons (Chapter 9), E-commerce (Chapter 10), IPR (Chapter 11), science & technology  (Chapter 12), education (Chapter 13), media (Chapter 14), dispute settlement (Chapter 15) and implementation procedures (Chapter 16).

The implementation of CECA is periodically reviewed by the two Governments and the closure of the first Review was announced on 1 October 2007. Issues addressed during the review included expansion of coverage of tariff concessions, implementation of MRAs, facilitation of movement of professionals, expanding market access to financial services and furthering IPR cooperation. Second review of CECA was launched in May 2010 and is in progress. Both the Governments are looking forwards for early conclusion of 2nd review of CECA for further strengthening the economic and commercial ties.

Full Text of CECA is available here

Bilateral trade expanded after the conclusion of CECA from US$ 6.7 billion in FY 2004-05 to reach US$ 27.85 billion in 2018-19. In 2021-22, bilateral trade between India-Singapore stood at US$ 30.11 billion. Imports from Singapore in FY 21-22 were US$ 18.96 billion (growth of 42.5% % vis-à-vis previous year), and exports to Singapore totalled US$ 11.15 billion (growth of 28.53 % vis-à-vis previous year). In the year 2022-23 (Apr-Aug) bilateral trade stood at US$ 14.75 billion compared to US$ 11.82 billion during Apr-Aug 2021-22. Exports to Singapore for the same period stood at US$ 5.2 billion vis-à-vis US$ 5.3 billion during Apr-Aug 2021-22 - recording a decline of -2.2 %. The imports stood at US$ 9.6 billion vis-à-vis US$ 6.5 billion recorded during Apr-Aug 2021-22 - a growth of 46.8%.

With the signing of amendment to DTAA (Double Taxation Avoidance Agreement) in 2005, providing for certain benefits for investments coming from Singapore, the country has emerged as the second largest investor in India with a share of 23% of the total FDI received by India US $ 136.653 billion has been received from Singapore as FDI from April 2000 to June 2022.  

A positive enabling environment provided by Singapore and its competitive tax regime have encouraged Indian companies to set up both manufacturing and servicing operations in Singapore and also base their regional headquarters for the Asia Pacific regional operations in Singapore. Strong air connectivity and the presence of a large Indian community, Singapore is emerging as a key offshore hub for Indian corporate. The Indian corporate presence in Singapore has also grown significantly and there are about 8000 "Indian" companies registered in Singapore. During official visit of PM Narendra Modi to Singapore in November 2015, a joint declaration was signed which elevated India- Singapore relations to a Strategic Partnership. PM Modi invited Singapore companies in a bigger way and assured them that the Government was committed to make easier to do business in India and described Singapore as “Incubator to India’s laboratory” for India’s new goal to turn itself into a Global Manufacturing Hub.