Profiling India-Singapore Bilateral Trade and Investment Relations

Posted by Written by Naina Bhardwaj Reading Time: 6 minutes

India and Singapore share close ties, supported by the India-Singapore Strategic Partnership. During FY 2021-22, Singapore accounted for over one-fourth of India’s trade with Southeast Asia, reflecting the success of the Comprehensive Economic Cooperation Agreement (CECA) between the two countries. Singapore continues to be India’s largest source of foreign direct investment, with Singaporean firms actively participating in urban planning and infrastructure projects across India. In this article, we analyze the current trade and investment trends between India and Singapore.

Singapore is a significant economic partner for India, with bilateral relations underpinned by the India-Singapore Strategic Partnership. In the financial year (FY) 2022, Singapore accounted for 27.3 percent of India’s overall trade with the ASEAN region, making it one of the country’s largest trade and investment partners in the region. The Comprehensive Economic Cooperation Agreement (CECA), which came into effect in 2005, serves as a crucial anchor for the economic engagement between India and Singapore.

Singapore has been the leading source of foreign direct investment (FDI) into India, contributing almost 23 percent of the total FDI inflows over the last two decades, with a total investment of approximately US$140.98 billion.

Overview of the India-Singapore bilateral relationship framework

Underpinned by shared values and economic opportunities, India and Singapore enjoy a multifaceted bilateral relationship. The two countries have extensive political and defense ties, growing economic and technological cooperation, and vibrant cultural and human links. Both countries are members of several forums, including the East Asia Summit, G20, Commonwealth, IORA (Indian Ocean Rim Association), and IONS (Indian Ocean Naval Symposium), reflecting their convergence on international issues.

To provide a larger framework for activities, the two countries have concluded several agreements, including the CECA, the Double Taxation Avoidance Agreement, the Bilateral Air Services Agreement, the Defense Cooperation Agreement, the Mutual Legal Assistance Treaty, and the Mutual Recognition Agreement on Nursing. The Joint Ministerial Committee and India-Singapore Ministerial Roundtable are among the more than 20 regular bilateral mechanisms, dialogues, and exercises.

The inaugural meeting of the India-Singapore Ministerial Roundtable took place in September 2022 in New Delhi, aimed at taking bilateral relations to new heights. The discussion focused on existing and emerging areas of cooperation such as digital connectivity, fintech, the green economy, green hydrogen, skill development, and food security. The meeting paved the way for further enhancing the strategic partnership between India and Singapore. During the visit, a Fintech Cooperation Agreement was signed between the Monetary Authority of Singapore (MAS) and the International Financial Services Centers Authority (IFSCA) in Gujarat.

Trends in India-Singapore trade relations

The India-Singapore CECA has played a significant role in boosting bilateral trade, which expanded from US$6.7 billion in FY 2005 to US$30.11 billion in FY 2022. Singapore is India’s sixth largest trade partner, accounting for 2.9 percent of India’s overall trade, while India is Singapore’s 12th largest trade partner with a 2.3 percent share in Singapore’s overall trade.

Bilateral trade has continued to grow, with Singapore’s imports from India increasing by 42.5 percent to US$18.96 billion and Indian exports to Singapore totaling US$11.15 billion, up by 28.53 percent in FY 2022.

India and Singapore’s bilateral trade in FY 2023 (April to August 2022) amounted to US$14.75 billion, indicating a significant surge of 24.7 percent as compared to the previous year’s corresponding period, which was recorded at US$11.82 billion. However, India’s exports to Singapore during the same period saw a slight decline of 2.2 percent, from US$5.3 billion in FY 2022 (April–August) to US$5.2 billion in FY 2023 (April–August). Meanwhile, India’s imports from Singapore experienced substantial growth of 46.8 percent, from US$6.5 billion in April–August 2022 to US$9.6 billion during the same period in FY 2023.

India-Singapore Trade Trends (Value in US$ Millions)


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India-Singapore Trade Trends

Major exports from India to Singapore

In FY 2022, India exported a total of 5,198 commodities to Singapore, generating export revenue of US$11.15 billion. Mineral fuels, mineral oils and products, bituminous substances, and mineral waxes were among the major items exported from India to Singapore, accounting for US$6,100.89 million of total export revenue, followed by nuclear reactors, boilers, machinery, mechanical appliances, and their parts, accounting for US$595.71 million.

During the first eight months of FY 2022 (April to November 2021), India’s exports to Singapore amounted to US$8.01 billion. Petroleum products (US$3,200 million) and ships, boats, and floating structures (US$936 million) were among the top commodities exported during this period. 

Major imports by India from Singapore

In FY 2022, India received 4,211 commodities totaling US$19.17 billion from Singapore. Nuclear reactors, boilers, machinery, and mechanical appliances dominated India’s import basket from Singapore in terms of value, amounting to US$3,460.44 million, followed by electrical machinery and equipment and sound and TV recorders and reproducers, valued at US$3,147.77 million.

Between April and November 2022, India’s imports from Singapore totaled US$14.94 billion, with coal, coke, and briquettes worth US$1,999 million, followed by electronic components worth US$1,520 million, among other things.

Economic ties and investment opportunities between India and Singapore

 Singapore remains the largest source of FDI into India, with a total FDI inflow of US$15.87 billion in FY 2022. Despite the challenges posed by the COVID-19 pandemic, Singapore’s cumulative FDI inflows into India were recorded at US$136.65 billion for the April 2000 to June 2022 period.

Additionally, Singapore is a significant source of external commercial borrowings and foreign portfolio investments for India. The top sectors attracting FDI equity inflows from Singapore include services, computer software and hardware, trading, telecommunications, and drugs and pharmaceuticals.

On the other hand, India’s cumulative outward FDI to Singapore reached US$82.33 billion in the January 2008 to October 2022 period, with the outward Indian FDI to Singapore standing at US$7.18 billion in FY 2022 and US$3.49 billion in FY 2021.

More than 9000 Indian companies are registered in Singapore, with notable public sector units, banks, and trade organizations like India Tourism, CII, FICCI, etc. having their offices there.

Over 440 companies from Singapore are registered in India, with two banks, Enterprise Singapore, the Economic Development Board, and the Singapore Tourism Board having offices here.

India-Singapore connectivity and tourism

In 2005, the Air Services Agreement between India and Singapore was revised, leading to an increase in connectivity between the two countries. As of now, there are eight airlines operating 500 weekly flights connecting Singapore with 15 Indian cities. Vistara, a joint venture between Singapore Airlines and Tata Group, and GoAir have also launched international flights from Singapore to Indian cities, further boosting connectivity.

On November 29, SIA announced it would convert its 49 percent stake in Vistara into a 20 percent stake in the new Air India Group, with additional US$250 million used to acquire another five percent. SIA could inject up to a further US$615 million after the merger is completed – projected to be by March 2024. This additional investment will depend on the group’s business plan and SIA’s funding options.

SIA has revealed plans to convert its 49 percent stake in Vistara into a 20 percent stake in the new Air India Group, with an extra US$250 million allocated to acquire a further 5 percent. An additional investment of up to US$615 million could be made by SIA after the merger’s completion, contingent on the enlarged Air India group’s business plan and SIA’s funding options. The merger is expected to be finalized by March 2024.

In 2019, India was the third-largest source of tourism for Singapore, with 1.41 million Indian tourists visiting the country. Post COVID, Indian tourists have become the second largest source of visitors to Singapore. The Singapore Tourism Board (STB) notes that “612,300 visitors from India arrived in Singapore up to November 2022”. Indians also stay the longest in Singapore at 8.61 days as compared to the average (5.19 days).

Fintech and innovation, cross-border payments

Cooperation in the areas of technology, innovation, fintech, and startups has also grown between India and Singapore. As of 2023, Singapore has successfully embraced different forms of Indian digital payment systems like RuPay, UPI (Unified Payments Interface), etc.

In July 2022, the Reserve Bank of India (RBI) signed an agreement with the Monetary Authority of Singapore to implement interoperability between UPI and PayNow. The UPI-PayNow linkage will enable users of each of the two fast payment systems to make instant, low-cost fund transfers on a reciprocal basis without a need to get onboarded onto the other payment system.

PayNow is the fast payment system of Singapore, which enables peer-to-peer funds transfer services available to retail customers through participating banks and Non-Bank Financial Institutions (NFIs) in the country. It enables users to send and receive instant funds from one bank or e-wallet account to another in Singapore by using just their mobile number, Singapore NRIC/FIN, or VPA.

Singaporean firms collaborate on urban planning and infrastructure projects

Singaporean companies have been taking a leading role in a range of smart city initiatives across India, partnering with local governments and private enterprises in various urban planning, logistics, and infrastructure projects. These include collaborations with Rajasthan, Himachal Pradesh, and Maharashtra on Master Plans for townships, as well as investment in the country’s aviation sector.

Furthermore, private and public sector institutions, including NITI Aayog, signed three Memorandums of Understanding (MoUs) during Prime Minister Modi’s visit to Singapore in 2018, focusing on urban and rural development. Singaporean companies have also been awarded contracts to develop homes and invest in India’s airport sector, demonstrating their commitment to India’s growth and development.

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