India, Singapore seek to take bilateral trade to $50 billion

Written by Neha Pal | New Delhi, Aug 28 | Updated: Aug 30 2008, 05:10am hrs
The Indian and Singapore governments are close to moving towards the implementation of the second phase of Indo-Singapore Comprehensive Economic Cooperation Agreement (CECA) in a bid to take the two-way trade to $50 billion by the end of the Eleventh Plan. The second-phase of the review of India-Singapore economic cooperation came to fore at a bilateral meeting between commerce and industry minister, Kamal Nath and minister for trade and industry, Singapore, Lim Hng Kiang recently.

According to sources, the commerce departments of both India and Singapore have sought a review of CECA, in view of the good progress that has been achieved because of the smooth trade flow between India and Singapore.

Singapore has tabled certain suggestions regarding the course of cooperation during the next phase. These include a target to double the annual bilateral trade to $50 billion by 2012. One of the key initiatives would be to study the Indo-Singapore trade patterns in comparison with Singapore-China flows, in order to identify opportunities for growth.

The official launch of the second review of CECA is targetted to be in the first half of 2009.

The proposed move seeks to broaden the scope of a comprehensive economic agreement so that the trade baskets of the two countries can be further enlarged.

One of the major sectors that would be affected by the developments made in the second-phase of CECA is the infrastructure sector. It would lead to better opportunities for the Singapore-based companies to participate in the public-private partnership projects. It would also help in exploring how India can use Singapore as a base to raise infrastructure funding.

One of the major aims of this second-phase would be to increase the bilateral trade between the two countries. The major steps that have been suggested for this include the broadning of the mutual recognition agreement (MRA) for harmonisation of laboratory testing and quality standards. Another important measure that would be taken up is improving the convergence of tariff concessions under CECA, to encourage mutually beneficial trade.

In order to promote greater business-to-business cooperation, a government mechanism would be established to review the recommendations emerging out of Singapore-India CEO forum.

The total foreign direct investment to India from Singapore during 2000-2008 has been around $5 billion. The agreement will help promote bilateral business missions to promote trade and investment. It would also be achieved by identifying ways in which Indian businesses can leverage on Singapore as a business hub in the Asia-Pacific to support their international expansion. Further, it would achieve greater competitiveness in areas such as science and technology, intellectual property rights, and the media, as provided for under the CECA cooperation chapters.

Another major sector that would be taken into the loop and will benefit a great deal by this second phase of agreement would tourism. It is said that the next phase would lead to a close co-operation in tourism sectors of the two countries as it would increase the two-way flow of tourists, businessmen and professionals.

India and Singapore had first initiated the negotiations regarding CECA about five years back.