Syllabus
GS Paper II – India and its neighborhood- relations
Context
Recently, the Indian Prime Minister visited Singapore as part of the second leg of a two-nation tour in South-East Asia.
India and Singapore Relations
Introduction
India and Singapore share a robust and multifaceted bilateral relationship, underpinned by historical ties, mutual trust, and shared strategic interests. Diplomatic relations were established in 1965, and since then, both nations have deepened cooperation across various sectors, including trade, defense, and technology. The Comprehensive Economic Cooperation Agreement (CECA) and the Comprehensive Strategic Partnership (CSP) have further strengthened economic and strategic ties. High-level visits, such as the recent one by the Indian Prime Minister, underscore the commitment to enhancing collaboration. This partnership is pivotal for India’s Act East Policy, positioning Singapore as a gateway to the ASEAN region.
Major ties between India and Singapore
- Historical Ties
- Pre-Colonial Era: Singapore was part of Indian empires like Srivijaya and Majapahit.
- Colonial Governance: Managed as a crown colony from Kolkata until 1867.
- Shared Colonial Legacy: Reflected in institutions, English usage, and a significant Indian community.
- Political Relations
- Early Recognition: India was among the first to recognize Singapore, establishing diplomatic ties in 1965.
- Strategic Gateway: Singapore serves as a crucial entry point for India into the Asia-Pacific and Southeast Asia, aligning with India’s Act East Policy and Indo-Pacific vision.
- Consular Services
- Diplomatic Consultations: Regular Foreign Office Consultations began in 1999.
- Visa Policies: Introduction of Tourist Visa-on-Arrival for Singaporean citizens in 2010.
- Strategic Partnership
- Elevated Relations: Upgraded to a Strategic Partnership in 2015.
- High-Level Visits: Frequent visits by Indian leaders, including participation in ASEAN-India, RCEP, and East Asia Summits.
- Parliamentary Delegations: In 2022, a 12-member Indian Parliamentary Delegation, led by the Lok Sabha Speaker, visited Singapore.
- Judicial Cooperation
- Judicial Exchanges: The Chief Justice of Singapore visited India in 2023 to deliver the inaugural lecture at the Supreme Court of India Day Celebrations.
- Economic Relationship
- Trade and Investment: Singapore is India’s largest trade and investment partner in ASEAN and the 6th largest globally, with a 3.2% share of India’s total trade.
- Imports: $21.2 billion.
- Exports: $14.4 billion.
- Financial Hub: Singapore is a key offshore logistics and financial center for Indian corporations, with nine Indian banks operating there.
- FDI Inflows: Singapore is the largest source of Foreign Direct Investment into India, contributing around $160 billion from April 2000 to March 2024, nearly a quarter of total FDI inflows.
- Trade and Investment: Singapore is India’s largest trade and investment partner in ASEAN and the 6th largest globally, with a 3.2% share of India’s total trade.
- Defence Cooperation
- Joint Exercises: Annual military exercises like SIMBEX (Singapore-India Maritime Bilateral Exercise) and Exercise Bold Kurukshetra.
- Science and Technology Cooperation
- Satellite Launches: ISRO has launched multiple satellites for Singapore.
- Collaborative Initiatives: Co-hosting of the inaugural ASEAN-India Women Scientists Conclave in April 2024 and an e-workshop on digital health and medical technologies in July 2024.
- Diaspora
- Indian Community: Ethnic Indians make up about 9.1% of Singapore’s resident population, approximately 350,000 people, along with around 100,000 Indian migrant workers.
- Cultural Relations
- Cultural Societies: Organizations like the Temple of Fine Arts, Singapore Indian Fine Arts Society, Nrityalaya, and Kalamandir actively promote Indian classical dance and arts in Singapore.
- Deepawali Celebrations: Deepawali is celebrated as a major Indian festival, comparable to the Chinese New Year and Malay Hari Raya in significance.
- Inter-Governmental Cooperation: A Memorandum of Understanding (MoU) for cooperation in the fields of Arts, Archives, and Heritage was signed in 1993 to enhance cultural ties.
- Tamil as Official Language: Tamil is one of Singapore’s four official languages. India’s first Thiruvalluvar Cultural Centre is set to be established in Singapore.
- Indian Schools: Several Indian educational institutions, including Global Indian International School, Delhi Public School, National Public School, Yuvabharathi International School, and DAV School, have branches in Singapore.
Key Agreements between India and Singapore
- Comprehensive Economic Cooperation Agreement (CECA) – 2005: The CECA between India and Singapore, signed in 2005, aims to enhance bilateral trade and investment by reducing tariffs, improving market access, and fostering economic cooperation across various sectors.
- Double Taxation Avoidance Agreement (DTAA) – 2005: The DTAA, established in 2005, prevents double taxation of income earned in both countries, thereby encouraging cross-border investments and economic activities by providing tax relief to individuals and businesses.
- Bilateral Air Services Agreement – 1968: This agreement, signed in 1968, facilitates air connectivity between India and Singapore, promoting tourism, trade, and people-to-people exchanges by allowing designated airlines to operate flights between the two nations.
- Defence Cooperation Agreement – 2003: The Defence Cooperation Agreement of 2003 strengthens military ties through joint exercises, training programs, and strategic dialogues, enhancing mutual defense capabilities and security cooperation.
- MOU on Foreign Office Consultations – 1994: The Memorandum of Understanding (MoU) signed in 1994 institutionalizes regular consultations between the foreign offices of India and Singapore, fostering continuous dialogue on bilateral, regional, and global issues.
- Mutual Legal Assistance Treaty – 2005: This treaty, concluded in 2005, facilitates mutual legal assistance in criminal matters, including the exchange of information, evidence, and cooperation in investigations, thereby strengthening judicial collaboration and combating transnational crime.
Recent developments in India and Singapore Relationship
- Strengthened Ties: Both nations reaffirmed the robustness of the Comprehensive Strategic Partnership (CSP) established in 2015.
- Cross-Border Payments: In 2023, India’s Unified Payments Interface (UPI) was linked with Singapore’s PayNow, enabling seamless cross-border transactions and enhancing digital connectivity between the two nations. Singapore is the first country with which India has initiated this cross-border Person-to-Person (P2P) payment facility.
- Investment Commitments: Singaporean companies have committed an additional $60 billion in investments into India.
- Global Expansion Hub: Singapore serves as a crucial hub for Indian companies seeking global expansion, thanks to its favorable tax regime and robust financial infrastructure. Approximately 9,000 Indian companies currently operate in Singapore.
- Platform for Cooperation: Initiated in 2022, the India-Singapore Ministerial Roundtable (ISMR) has become a vital platform for accelerating cooperation in advanced manufacturing, sustainability, healthcare, and digitalization. The second ISMR was held in Singapore in 2024.
- India-Singapore Semiconductor Ecosystem Partnership: Both nations have signed four significant MoUs covering semiconductors, digital technologies, skill development, and healthcare. The India-Singapore Semiconductor Ecosystem Partnership was among the agreements signed.
- Celebrating Diplomatic Relations: As both countries prepare to celebrate 60 years of diplomatic relations in 2025, the contributions of the Indian diaspora, including notable figures like Subhash Chandra Bose and the Azad Hind Fauj, are acknowledged and celebrated.
Potential Benefits
- Promotes Self-Reliance: Developing a domestic semiconductor ecosystem is crucial for India to mitigate supply chain disruptions caused by geopolitical tensions, such as China’s assertiveness in Taiwan and the South China Sea.
- Enables Industry Development: There is potential for partnership with Singapore in areas like talent development and sharing best practices for managing semiconductor industrial parks.
- Attracts Expansion: India’s vast land resources and cost-effective labor force make it an attractive destination for Singaporean semiconductor companies looking to expand their operations.
- Enhances Technological Capabilities: Establishing a semiconductor ecosystem can position India as a hub for technological innovation, driving advancements in electronics and related sectors.
- Job Creation: The semiconductor industry can generate significant employment opportunities, contributing to economic growth and development.
- Increases Global Competitiveness: By developing a robust semiconductor industry, India can enhance its global competitiveness and reduce dependency on imports.
- Encourages Research and Development: Collaboration with Singapore can lead to joint research and development initiatives, fostering innovation and technological advancements in the semiconductor field.
- Supports Digital Transformation: A strong semiconductor industry is essential for supporting India’s digital transformation initiatives, including smart cities, IoT, and AI applications.
Challenges
- Technological Constraints: Singapore’s semiconductor industry primarily focuses on mature-node chips (28 nm or larger), which are utilized in household appliances, automotive, and industrial machinery.
- Inability to Produce High-End Logic Chips: The industry lacks the capability to manufacture high-end logic chips (7 nm or smaller), essential for AI applications, due to the need for specialized production techniques.
- High Production Costs: The high costs associated with setting up and maintaining advanced semiconductor manufacturing facilities can be a significant barrier.
- Skilled Workforce Shortage: There is a shortage of highly skilled professionals required for the development and production of cutting-edge semiconductor technologies.
- Supply Chain Vulnerabilities: The industry is heavily reliant on importing raw materials and advanced machinery, making it vulnerable to global supply chain disruptions.
- Sustainability Issues: Semiconductor manufacturing is resource-intensive, raising concerns about environmental sustainability and the need for eco-friendly practices.
- Global Competition: The global semiconductor market is highly competitive, with established players like Taiwan and South Korea dominating the high-end chip segment.
- Compliance and Standards: Navigating complex regulatory frameworks and meeting international standards can pose additional challenges for the industry.
Way Forward
- Investment in R&D: Increase funding for research and development to advance semiconductor technology and bridge the gap in high-end chip production.
- Skill Development Programs: Implement specialized training programs to build a skilled workforce capable of handling advanced semiconductor manufacturing processes.
- Strengthening Supply Chains: Develop robust and diversified supply chains to reduce dependency on imports and mitigate vulnerabilities.
- Sustainable Practices: Adopt eco-friendly manufacturing practices to address environmental concerns and ensure long-term sustainability.
Conclusion
Addressing the challenges in the semiconductor industry requires a multifaceted approach, including investment in R&D, skill development, and sustainable practices. By leveraging strategic partnerships and fostering innovation, India can enhance its semiconductor capabilities and reduce dependency on imports. This will not only boost economic growth but also position India as a key player in the global semiconductor market.
Reference: IE
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Practice Question
Discuss the multifaceted relationship between India and Singapore, highlighting key areas of cooperation and recent developments. How do these relations align with India’s broader strategic interests in the Asia-Pacific region?
Guidelines to Answer
Introduction
- Briefly introduce the historical context of India-Singapore relations.
- Mention the significance of the relationship in the current geopolitical scenario.
Body
- Historical Ties:
- Pre-colonial and colonial connections.
- Shared cultural and institutional legacies.
- Political and Strategic Partnership:
- Diplomatic engagements and high-level visits.
- Strategic agreements like the Comprehensive Strategic Partnership (CSP).
- Economic and Trade Relations:
- Key agreements such as CECA and DTAA.
- Trade statistics and investment flows.
- Role of Singapore as a financial hub for Indian companies.
- Defence and Security Cooperation:
- Joint military exercises and defence agreements.
- Collaboration in maritime security and counter-terrorism.
- Science and Technology Collaboration:
- Joint initiatives in digital technologies and semiconductor development.
- ISRO’s satellite launches for Singapore.
- Cultural and Educational Ties:
- Role of Indian diaspora and cultural exchanges.
- Educational institutions and student exchanges.
- Recent Developments:
- Recent high-level visits and MoUs signed.
- Integration of UPI with PayNow for financial transactions.
Conclusion
- Summarize the key points of cooperation.
- Highlight how these relations support India’s strategic interests in the Asia-Pacific region.
- Suggest potential areas for future collaboration.