Singapore India: Singapore has always been a popular place for companies, with many business facilities available. Easy tax regime, easy tax regime network, availability of quality labour, geo-political stability, easy access to investment, excellent connectivity and excellent infrastructure to sell goods to the rest of the world… these are the factors that make companies of the world Encourage people to come to Singapore and do manufacturing.
In addition, Singapore has a significant Indian diaspora and has been a favourite destination for Indian companies. A report by the Indian High Commission in Singapore states that around 9,000 Indian companies are registered in Singapore.
Large Indian companies such as the Tata Group, Mahindra & Mahindra, Reliance Industries, Advertising Group, Infosys and Wipro have a strong base in Singapore, so India and Singapore have had strong business ties. But, now, many companies are turning to India for manufacturing from Singapore.
Know The India-Singapore Business Relationship
Bilateral trade between India and Singapore in the financial year 2021-22 stands at US$ 30.11 billion, which accounts for 2.9 per cent of India’s total trade. At the same time, Singapore is its sixth most significant trade partner, India. At the same time, India is Singapore’s 12th largest trading partner, with a share of 2.3 per cent of the total trade of Singapore.
India’s FDI (foreign direct investment) inflows to Singapore for 2021 stood at US$ 18.41 billion, while FDI equity inflows from Singapore to India reached US$ 15.87 billion during FY 2021-22. And let’s look at the total trade between the two countries. It is known that Singapore is the second largest investor in India, and Singapore invested USD 140.99 billion in India between April 2000 and September 2022. These figures are enough to tell how strong the business relations between India and Singapore are.
Singapore invests in India in the service sector, computer software hardware, telecommunication, medicine and pharmaceuticals, but now India’s manufacturing sector is also attracting Singaporean investment. Manufacturing investment is coming to India from Singapore, giving wings to India’s manufacturing sector.
How Is India Attracting The Manufacturing Sector?
In 2014, Prime Minister Narendra Modi took over the reins of India’s power. After that, the Government of India has done much work in the cities adjacent to the sea to speed up the manufacturing sector. The Modi government has done a lot of work on ‘Make in India’, in which several steps have been taken to bring new technology to India and facilitate companies.
For this, the Government of India has made it easier for foreign companies to operate in India. Between 2016 and 2019, India moved from 130th to 63rd out of 190 countries in the World Bank’s Ease of Doing Business Index, which shows that India has made a lot of progress in attracting investments.
India aims to increase the share of the manufacturing sector in gross domestic product (GDP) from 16 per cent to 25 per cent by 2025.
This Means India, which till now has been based on the service sector, is currently preparing a cocktail of manufacturing and the service sectors, which can yield excellent results.
In the last few years, companies like Apple, Samsung, Kia, Boeing, Siemens and Toshiba have made India their new ‘home’ to shift a significant part of their production to India. However, in the last three years, due to the Covid crisis, there have been many difficulties in this work, and geo-political tensions have also played a role; despite this, India has become an important destination for investment.
Singaporean companies that used to manufacture most of their products in neighbouring Southeast Asian countries and China appear to be doing the same.
Singaporean firms that have shifted their operations to India are contract manufacturers that support and supply large multinational corporations (MNCs), some of whom have re-established themselves in India.
Singapore Companies Coming For Manufacturing In India
Singapore companies have so far been doing most of their products in China and its neighbouring South-East Asian countries, but now many of them have turned their direction towards India.
Singaporean firms that have shifted their operations to India are contract manufacturers who work for large multinational companies (MNCs) and produce goods based on their orders. These contract manufacturers have started manufacturing in India; contract manufacturers manufacture and supply goods in India.
Enterprise Singapore (EnterpriseSG), helping Singapore companies to come to India and manufacture in India, believes that companies should now produce in India, as they can make better profits by producing in India.
Enterprise Singapore is a statutory board under the Ministry of Trade and Industry of the Government of Singapore. It aims to support the development of Singapore’s small and medium enterprises, expand their capabilities and help them gain a foothold in the international market.
According to a Singapore government report, there has been a 40 per cent increase in the number of companies working with Enterprise Singapore in India since 2022, post-Covid, compared to the pre-Covid pandemic. These companies include three sectors: information and communication, professional services, and manufacturing.
