Indian Prime Minister Narendra Modi speaks before a meeting with Brunei Sultan Hassanal Bolkiah at Istana Nurul Iman in Bandar Seri Begawan on September 4, 2024.
Dean Kassim | AFP | Getty Images
SINGAPORE — India and Singapore on Thursday signed a memorandum of understanding to cooperate on several key areas including semiconductors, digital technology, skill development and healthcare.
The announcement came during Indian Prime Minister Narendra Modi’s two-day visit to the Lion City, which began on Wednesday after a trip to Brunei.
“Singapore and India have built a strong foundation for a lasting partnership. The next phase of the Singapore-India partnership is very promising,” Singapore Deputy Prime Minister Heng Swee Keat said at the Singapore-India Forum Organized by the Singapore-India Partnership Foundation, Institute of South Asian Studies and Singapore Business Federation.
“Singapore, India and the rest of Asia must continue to strengthen connectivity and economic integration so that capital, ideas and talent can be optimally utilized,” he said.
Although South Asia continues to be the world’s fastest growing region — and India is the world fastest growing major economy — the region is still struggling to catch up in terms of GDP per capita.
India’s per capita GDP currently stands at $2,730, significantly lower than that of the United States ($85,370), China ($13,140), Germany ($54,290) and Japan ($33,140). data from the International Monetary Fund has shown. Those four economies are also the ones in which the South Asian nation currently lags behind in terms of Total GDP.
“Singapore is not just a partner, but also an inspiration to every developing country. We want to create a group of Singaporeans in India,” Modi said in a speech. meeting with Wong.
On Wednesday, Modi and Singapore Prime Minister Lawrence Wong visited Singapore semiconductor and electronics company AEMexpressed intention to strengthen cooperation in the chip sector.
Mr Heng stressed that increased cooperation could also help both countries overcome “common challenges” such as climate change, ageing populations and public health.
Modi’s entourage also includes External Affairs Minister S. Jaishankar, National Security Advisor Ajit Doval and other government officials.
In a post on XModi called Wong a friend and said, “We both agree on the need to boost trade relations.”
This country belongs to India sixth largest trading partneraccounting for 3.2% of India’s total trade. Imports from Singapore in FY2024 were $21.2 billion, while exports were $14.4 billion.
Asia’s largest financial centre is also the largest source of foreign direct investment into India. The cumulative FDI inflows from Singapore to India reached nearly $160 billion from April 2000 to March 2024accounting for nearly a quarter of total FDI inflows into the South Asian country.
Lessons from Singapore’s strategy
Political watchers told CNBC ahead of Modi’s visit that India could learn many lessons from Singapore as it aspires to become a global design and manufacturing hub.
“Indians have not ignored the rise of China, partly because of the significant benefits they received from Singapore in the 1980s and 1990s, and perhaps even to this day,” Anit Mukherjee, senior lecturer at King’s College London, told CNBC.
Singapore has long been praised for its modern manufacturing facilities, attracting major global technology and pharmaceutical companies.
According to Singapore, the city-state accounts for 10% of the world’s chip production and about 20% of global semiconductor manufacturing equipment output. Economic Development Board.
Apple said in April that it would invest more than $250 million to expand Ang Mo Kio facility in Singapore, with CEO Tim Cook saying the country is “truly a unique place.” A month later, the global biopharmaceutical company AstraZeneca announced plans to build a $1.5 billion manufacturing facility in the city
India’s manufacturing sector has also made significant strides in the past few years, with Apple supplier Foxconn pledging to increase investment in the country, while Micron Technology expected to produce the first semiconductor chips in India by early 2025.
However, the world’s fifth-largest economy still has a long way to go.
“When you deploy billions of dollars to boost a domestic industry, there are a lot of issues that need to be addressed. So this is definitely the time for India to learn from Singapore’s successful strategy,” said Samir Kapadia, CEO of India Index and managing director at Vogel Group.
Over the past seven years, Singapore has opened skill development centres in several Indian states, such as New Delhi and the northeastern city of Guwahati.
“It’s not just about encouraging investment in the semiconductor industry, it’s about learning how to manage large-scale industry planning and incentive initiatives,” Kapadia added.
— CNBC’s Vinay Dwivedi contributed to this report.
