With eyes on Comprehensive Economic Cooperation Agreement (CECA) with India and free trade agreements with several countries, Singapores perception of connectivity with the world market is assuming a new meaning. The EDB view is that with the free-trade agreements, Singapore will be a key node in the global economic network, linked to all the major economies. According to an official in the EDB India chapter, Within Asia, we will be a major hub serving the region, and act as gateways to India and China. The CECA is expected to conclude within a few months, and talks between ASEAN and China are under way.
Robust infrastructure, pro-business policies and stable social and political environment are seen as Singapores core strengths in drawing Indian firms to have business relations with entities in other countries. Going purely by numbers, there are over 7,000 multinational corporations in Singapore, and more than 4,000 are engaged in regional activities. As for trade between India and Singapore, the value was estimated at S$6.8 billion in 2002.
Already many Indian companies and entrepreneurs see excellent opportunities for networking and for expanding into the region and to the world from here, according to EDB. Although officials were tight-lipped about the plans of Indian companies to move into other regions via Singapore, Bangalore-based vMoksha Technologies is a case in point. IT outsourcing services company vMoksha forged tech partnerships in Singapore, and is understood to be expanding into Asia-Pacific, including China, using Singapore as a launch pad, as per EDB data.
There are other Indian ventures which have used Singapore as a hub too. Take for instance Encore Technologies Singapore (ETS) a joint venture between Indian software giant Encore Software and Time2Talk a mobile computing start-up in Singapore. The JV is responsible for the globalisation of Simputer, a low-cost mobile computing device. ETS positioned Simputer as invented in India but made in Singapore product. Encore secured partnership with more than 60 partners across 13 countries soon after the launch. ETS co-chairman Vinay Despande, it is learnt, expects to expand its partnership network to over 500 in a couple of years.
Also, India-born scientist, Dr CH Krishnamurthy Rao, has chosen Singapore as his strategic base for test-bedding and commercialising his cutting-edge membrane technology to produce Team Alkaline Water (TAL), projected as a healthy lifestyle product, according to EDB.
Then, theres Indian pharma packaging research company Bilcare. Singapore is tipped to be Bilcares launching pad to reach out to different markets in the region Indonesia, Malaysia, Vietnam and China.
But, how is the Singapore route cost-effective for Indian companies when they want to reach out to other countries With the FTAs, there will be cost-savings. The countries with which FTAs are in force: New Zealand, Japan, European Free Trade Area (EFTA), Australia, and the US. FTAs under negotiation: ASEAN-China, Canada, India, Mexico and Jordan. FTAs in the works: South Korea and Sri Lanka.
But, cost is just one factor, EDB believes. Far more important is value creation, it states. The city-state is working on the future. Singapore will continue to increase its cost efficiency and productivity while moving up the manufacturing value chain and strengthening its services offerings, to remain a compelling business hub for investors.
Meanwhile, Indian companies come to Singapore for intellectual property creation and management, too.