May 28 (Punjab Khabarnama) : India and Singapore are finalising several agreements in areas ranging from digitalisation to food safety and healthcare that are expected to be signed at the second meeting of a bilateral ministerial roundtable, people familiar with the matter said.
The agreements are expected to boost trade and commercial relations with Singapore, which has accounted for more than a fifth of India’s foreign direct investment (FDI) equity inflows since 2000. The inaugural meeting of the India-Singapore Ministerial Roundtable (ISMR) was held in New Delhi in September 2022 and the next meeting will be held in the Southeast Asian state soon after the Indian elections.
The two sides are working on about half a dozen memorandums of understanding (MoUs) in areas such as digital cooperation, food safety and skill development that are expected to be signed during the upcoming meeting, the people cited above said on condition of anonymity.
The two sides are also exploring the possibility of cooperating on semiconductors, an area where the Indian side has unveiled ambitious plans to achieve self-reliance in manufacturing chips, the people said.
The bilateral relationship has been anchored by trade and economic ties, with Singapore accounting for the highest FDI inflow of $17.2 billion during fiscal year 2022. In 2023, India was Singapore’s 12th largest trade partner and also its 12th largest export destination.
The ISMR is a special mechanism led by the ministers of foreign affairs, finance and trade of the two sides that focuses on enhancing economic cooperation and identifying new areas for collaboration. At its inaugural meeting, the roundtable identified five areas of collaboration – digitalisation, energy and green economy projects, food cooperation, skills development, and pharmaceuticals and healthcare.
The cross-border real-time linking of India’s Unified Payments Interface (UPI) and Singapore’s PayNow in February 2023 was one of the first outcomes of cooperation under the digitalisation pillar and the two sides are currently up to about 3,000 transactions a month.
The linking of the digital payment systems drove down the cost of remittances from Singapore from about 20% to less than 1%, though there is a need to widen the cooperation by including more banks, the people said. Currently, the system links only four banks in each country.
According to figures provided by the government in Rajya Sabha, Singapore was in fourth place – behind the US, the UAE and the UK – in terms of country-wise share of inward remittances during 2020-21, when total remittances to India were worth $80 billion.
While most investments from Singapore were earlier concentrated in southern and western states such as Maharashtra, Karnataka, Telangana and Tamil Nadu, Singapore is now looking towards new engines of growth such as Assam, Gujarat and Uttar Pradesh, the people said.
Assam is also important in the context of Singapore’s plans to achieve greater food security and diversify its sources of food items. In recent years, India and Singapore have also explored the possibility of growing food in Indian states.
As Singapore focuses on diversifying its sourcing of grains, meat and poultry, Assam is being seen as a potential source of vegetables and fruits. As a proof of concept, the first air cargo shipment of fruits was sent from Assam to Singapore in August 2023, the people said.
