As India and Singapore commemorate 60 years of their diplomatic relationship and 10 years of strategic partnership, Dr. S. Jaishankar, India’s external affairs minister, paid a visit to the Lion City. Jaishankar’s short but timely visit should be seen in continuation with Singaporean President Tharman Shanmugaratnam’s five-day visit to India in mid-January 2025.
During Tharman’s visit, the two countries worked toward developing an action plan this year, as suggested by Indian Prime Minister Narendra Modi during his last visit to Singapore in September 2024, when India and Singapore elevated their relationship to a Comprehensive Strategic Partnership.
Jaishankar’s visit not only provided an opportunity to follow up on the action plan developed earlier but also to deliberate upon new avenues of cooperation between the two nations, considering the challenges posed by U.S. President Donald Trump’s tariff policies and the heightened tensions between the United States and China over semiconductors and critical minerals. Both India and Singapore are facing Trump’s tariffs, but their situation is considered much better than peers such as Malaysia, Indonesia, Japan, and South Korea.
The significance of the visit also lies in the fact that it will allow Singapore to find ways in which India can still work with ASEAN on the free trade agreement (FTA) front. According to the reports, India, unhappy with the sluggish pace of the review of the India-ASEAN FTA and a consistent negative balance of trade, is considering terminating the trade deal, which came into force in 2010.
Singapore, as India’s topmost trading partner in the ASEAN region and a hub for Indian services sector trade in the region, would want India to stick to the FTA. However, Singapore will also seek to explore avenues of enhancing bilateral trade and investment cooperation should India decide to walk out of the free trade agreement.
Beyond a robust trade in goods, India and Singapore are working together in new areas such as semiconductors, digital cooperation, healthcare education, skill development, petrochemicals, sustainability, and maintenance, repair, and overhaul (MRO) in the aerospace sector. Singapore’s investment in India is a win-win scenario for both.
While India is striving toward becoming a “Vikshit Bharat” by 2047, its current infrastructural gap, high operational costs, land acquisition, and lack of skilled labor remain the hurdles that a developed country like Singapore can help it cross.
Similarly, despite having all the above-mentioned resources, Singapore has a high cost of labor and services. As a result, investors in Singapore are looking abroad to invest. While China heavily dominates the Southeast Asian economy and there is high competition among ASEAN countries, given India’s close ties with Singapore and cost-effective labor and service, New Delhi presents a viable option to Singapore.
India desires to become a semiconductor hub. However, it currently faces a shortage of resources and professionals across the various verticals of the industry. The India Electronics and Semiconductor Association (IESA) had plans to send some of its workforce to Singapore for semiconductor training. The signing of an MoU between the Skill Development & Technical Education Department, Odisha, and the ITE Education Services (ITEES), Singapore, during the Singapore president’s visit, has enabled the two countries to train a large portion of the Indian workforce in the country itself.
Similarly, Singapore dominates the MRO sector, while India aspires to become a global hub for MRO. India’s MRO market is currently valued at $1.7 billion, projected to grow to $4 billion by 2031. While the Indian government has introduced reforms for simplified tax structures and is collaborating with companies like Airbus and Hindustan Aeronautics Limited, high operational costs, infrastructure gaps, skill shortages, and regulatory bottlenecks present challenges to India’s vision. Therefore, collaborating with Singapore will help New Delhi fulfill its aspiration.
While the Indian government has been working to strengthen ties with Southeast Asian countries, many Indian states – to fulfil their individual goals – are also trying to reach out to Southeast Asian countries. Tharman’s visit to Odisha followed the visit of Odisha’s chief minister to Singapore. Notably, Singapore is the official partner in Odisha’s flagship biennial investors summit Utkarsh Odisha (Make in Odisha Conclave-2025).
Like Odisha, other Indian states are also trying to lure investments from Southeast Asian countries by reaching out to them, reflecting the success of Indian paradiplomacy. For instance, in early 2025, Assam’s IT and Science and Technology Minister Keshab Mahanta visited Thailand to promote the Assam 2.0 Investment and Infrastructure Summit and invited Thai businesses and investors.
Additionally, Singapore is already developing a satellite city around Guwahati – the capital of Assam.
Last year, in January 2025, during the Tamil Nadu Global Investors Meet, Singapore laid out its plan to invest $5 billion in infrastructure, technology, sustainability and data centers. Furthermore, Singapore and Tamil Nadu are establishing a green corridor from Tuticorin in Tamil Nadu to Singapore.
Despite all the opportunities and initiatives, as Tarun Das – an Indian industrialist who was recently conferred honorary citizenship by Singapore – pointed out, there remains a “communication gap between India and Singapore with two very different systems and processes.” Due to the arduous land and registration process, high tax on construction, and complex paperwork, among other factors, mid-size Singaporean companies are still uncomfortable setting up businesses in India. Das suggested that India can offer “townships” to Singapore, similar to the ones offered to Japan and South Korea. These townships are industrial zones providing a streamlined environment for companies to initiate and expand their operations in India, reducing administrative hurdles.
The India-Singapore partnership offers promising potential, particularly in the context of challenges and vulnerabilities thrown open in the regional context. Jaishankar’s visit will help address some of these while opening a pathway for further consultations.