The India-Singapore economic corridor is looking up
India is poised to play a pivotal role in the post-pandemic world order. As the world’s fastest growing large economy, India’s strong fundamentals have positioned it to move from fifth place to third in terms of economic size by 2030. Therefore, it is no surprise that it has built strong commercial relationships with countries across the world and has become a magnet for inbound investments.
The US and Europe have historically been India’s largest investors, and while this trend is likely to continue unabated, there has been a notable eastward shift over the past decade. As domestic businesses expand, they are increasingly seeking ways to tap Asian markets and forge links with Asian supply chains. Enter Singapore, the gateway to Asia—a global trading hub with a business-friendly environment and competitive tax regime.
India has historic commercial, cultural and people-to-people links with Singapore stretching back millennia. Both parties have continued to build on this foundation, evidenced by the Comprehensive Economic Cooperation Agreement (CECA) that was signed in 2005. After this agreement, bilateral trade more than quadrupled to reach $35.6 billion in 2022-23, underlining the corridor’s efficacy.
Ever since 100% FDI was permitted in India for most types of manufacturing, multiple large Singaporean conglomerates and manufacturing players as well as state institutions have been ramping up—or planning to ramp up—investments in India. Meanwhile, Indian state governments have been collaborating with Singapore for initiatives like smart cities and urban rejuvenation, as well as skills development. Trade has seen a similar trajectory, with the Association of Southeast Asian Nations (ASEAN) being named a central pillar of
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