The Speaker of Singapore’s Parliament, Dr. Halimah Yacob highlighted last week at the Annual General Meeting of the Singapore Indian Chamber of Commerce and Industry (SICCI) that trade relations shared between Singapore and India has become stronger in the last decade. Asiabiz Services, a leading incorporation services consultancy in Singapore, recognizes that this announcement spells good news to Indian businesses that want to set up in the city-state.
“With an exponentially growing consumer market that has a burgeoning upper middle class segment that is targeted to reach 129 million by 2025, India today poses an ocean of trading potential to Singapore. Conversely, now that trade relations have bolstered over the past decade, Singapore has become a reliable and crucial partner to India, opening avenues for its businesses to use the city-state as a launching pad to the rest of Asia,” said Mr. James Nuben, Head of Taxation at AsiaBiz Services.
Singapore has become a top pick for international traders due to its attractive infrastructure in air, sea, land, telecommunication and finance. With a robust brand name that endows traders with high credibility as counterparties in transactions, and its stable political and pro-business climate, Singapore has managed to score high marks from India traders. The result is a vibrant Singapore-India trade that entails a myriad of businesses that is not limited to education, healthcare, F&B and retail, at an estimation of $35.4 billion of trading value as of 2011.
SINGAPORE IS NOT PERFECT
However, Singapore is not free of challenges. Although Singapore has an advantage of strategic geographical positioning that allows traders to complete the 24-hour trading cycle with other trade hubs like London and New York, it is not a natural trade hub. It is neither a significant consumer market nor a key producer, which makes it less competitive against other countries which are building their own trade infrastructure and network. In addition, Singapore’s tight labour market poses challenges for Indian trading companies.
HOWEVER, IT OFFERS INDIAN BUSINESSES AN ALTERNATIVE
On the other hand, although India appears to be aggressively pursuing a more liberal international trade regime, much of the country’s trade policies are still considerably restrictive. As one of the few nations in the world that continues to prohibit foreign investment in retail trade, India must address its persistent domestic protectionism of trade and investment if it were to aspire to become a regional leader in trading.
AsiaBiz Services however, has a bright outlook for both countries’ trade potentials. With an upcoming change in political leadership in India, there is a widespread belief that India will soon experience a marked shift from its protectionist economic stance to one that benefits consumers.
Similarly, Singapore has also embarked on a two-pronged approach to tackles its key problems. This is accomplished by creating a more comprehensive business environment that is complete with enhanced access to capital, markets and talent pool, in addition to building new engines of economic growth. Such engines of growth indicates nurturing a much as a larger and more developed trading cluster that comprises of a diverse array of trading companies of various nature, size and profile.
“Singapore may face challenges in becoming a global trade hub, but it has undertaken a number of measures to successfully pair up with regional players like India to move into the next league. Overall, we expect to see a steady growth of Indian trading companies coming to Singapore to take advantage of the benefits offered here,” affirmed Mr. James Nuben.