Speech by Deputy Prime Minister and Coordinating Minister for Economic Policies Heng Swee Keat at the Confederation of India Industry Annual Meeting on 11 August 2021.
Mr Chandrajit Banerjee,
Director General, Confederation of Indian Industry
Dr Naushad Forbes,
Former CII President, and Co-Chairman of Forbes Marshall Limited
Ladies and gentlemen,
A very good morning to all of you. Let me first thank CII for inviting me to address your Annual Meeting today, and the honour of being the first speaker of the session. It is always a pleasure to address the leaders of India’s public service as well as the captains of India’s industries and enterprises. Let me also take this opportunity to wish India a happy 75th Independence Day in advance.
I last visited India in October 2019. On that visit, I had the privilege to pay tribute to Gandhi-ji at the Raj Ghat. Gandhi-ji was instrumental to India’s independence. The values he stood for - equality, inclusivity, and non-violence – are very much aligned with Singapore’s own ideals.
Only a few months later, COVID-19 struck. Dr Naushad gave us a very good characterisation of the three phases. Across, the world, the virus has disrupted our livelihoods and taken many lives. The pandemic has also accelerated ongoing structural shifts. We face a future that is going to be faster-paced, uncertain and more complex.
This year’s theme – “India@75: Government and Business working together for Aatmanirbhar Bharat" is especially significant. The campaign for a self-reliant India is about harnessing the best in every Indian company and community to overcome the odds, to build a stronger and more cohesive India. In a world disrupted by COVID-19, India must also work with partners beyond its shores, to make greater progress for itself and the world. As someone who has been watching India with an abiding interest from the outside, allow me to share three key points with you today.
Relations Between India and Singapore Have Grown By Leaps and Bounds
First, the relations between India and Singapore have grown by leaps and bounds, benefitting our peoples. India has a long and rich history of linkages with Singapore. Our relationship goes back more than two hundred years – when a trading port was established in Singapore by the British East India Company. Indian traders and workers arrived here – Sikhs, Gujaratis, Parsees, Tamils, and from other parts of the Indian sub-continent.
Singapore has been a steadfast supporter of India’s economic liberalisation from very early on. When our then-Prime Minister Goh Chok Tong was Chief Guest at India’s Republic Day celebrations in 1994, he was accompanied by a business delegation. This sparked an “India Fever” in Singapore, which was to become the first step in a more concerted effort to work closer with each other.
When then-Prime Minister Atal Bihari Vajpayee visited Singapore in 2002, both sides agreed to pursue a Free Trade Agreement to take economic relations forward. This culminated in the signing of the India-Singapore Comprehensive Economic Cooperation Agreement, or CECA, in 2005. I was Singapore’s Chief Negotiator for this agreement, through 13 rounds of formal negotiations. During the several years of negotiations, I had to travel to various states in India to persuade regional leaders that CECA was not only beneficial for Singapore, but for them as well. Through these visits, I gained an appreciation of the vastness and scale of your country, and the diversity of cultures, languages, and norms. This diversity can be a great strength for India, especially in a more complex world.
CECA remains significant as it was the first comprehensive bilateral trade agreement that India signed with any country. The agreement has benefitted our two countries. Bilateral trade has grown. With better conditions for investments, Singapore’s direct investment in India grew 50 times, to US$45 billion. Singapore has been India’s largest source of FDI in recent years. India’s investment in Singapore has also increased. Our economic partnership has helped our two economies grow.
Singapore and India’s partnership goes beyond headline economic figures. We regularly refresh the agenda to keep with the evolving priorities of both sides. When Prime Minister Modi met Prime Minister Lee Hsien Loong in Singapore in 2018, both leaders agreed to add FinTech and innovation as new pillars of our economic partnership. During my visit to India in 2019, I called on Prime Minister Modi. We reaffirmed our commitment to strengthen collaboration. These high-level meetings paved the way for stronger economic cooperation, which has in turn improved the lives of our people.
When COVID-19 struck, Singapore and India stood in solidarity with each other. India helped keep the supply chain for essential goods open early in the crisis, while Singapore sent oxygen-related supplies when India experienced its second wave. Singapore communities and companies have also come forward with their support. Temasek Foundation, for example, donated medical supplies to various Indian states. Singapore company Clearpack partnered Rajasthan-based social incubator, PARC, to develop a Made-in-India emergency respirator system to address the shortage of ventilators.
As we seek to emerge from the pandemic and navigate towards a new normal, Singapore and India can build our strong relationship to even greater heights.
Potential to Collaborate on New Areas of Opportunities
This brings me to my second point. There is significant potential to collaborate on new areas of opportunities – such as FinTech and sustainability.
In recent years, India made great strides to improve its business climate and attract foreign investments. From being ranked 142nd in the World Bank’s Ease of Doing Business Index in 2014, it rose to 63rd last year.
This improved regulatory climate has benefitted Indian industries, including importantly its tech sector. India now has nearly 60 tech ‘unicorns’, including those that were newly minted last year despite the pandemic. Many of these firms —such as Zomato, Pine Labs and Paytm — have attracted global investors, including Singapore-based funds.
India also benefits from a young population. This can translate into a significant demographic dividend if it can make the most of new opportunities and equip its people to take on these jobs. This is not an easy undertaking, given that there are more than 580 million Indians under the age of 25. Singapore is contributing to this effort, partnering India to establish three skills centres – in Guwahati, New Delhi, and Udaipur — to help train India’s youths. Despite the disruptions brought about by COVID-19, we have confidence in India’s next generation.
I look forward to the greater momentum for reform, innovation and human capital development in India. With your talent pool, the wide application of tech, and the sheer scale of your markets, this will have a transformative impact on improving lives and tackling global challenges. CII has done well to identify two important areas where policy reform and technological innovation can work hand-in-hand to effect positive change: digital and the green economy.
The digital revolution will be a key driver of economic growth and transformation in the coming years, not just in India but all over the world. Prime Minister Modi has been a strong advocate of “Digital India” . Indeed, digitalisation is already changing lives in India, as it enables India to leapfrog into the digital age. One famous pillar of “Digital India” is Aadhar, the world’s largest biometric ID system. Aadhar has provided the foundation for improving public sector service delivery, and promoting social and financial inclusion. India’s strides in digital identity are accompanied by digital developments in other areas, such as digital payment mode e-RUPI. e-RUPI is an example of how FinTech promotes inclusion for the unbanked, as individuals can use their phones to redeem the vouchers, without the need for a bank account.
Singapore is keen to partner India to grow and better integrate our digital economies. Following the meetings between our Prime Ministers in 2018, a Joint Working Group on Fintech was established to drive innovation. There are several areas of cooperation being worked on. One area is the building of connectivity on national payment rails to support trade, tourism and cross border payments. This is through a partnership between Singapore’s NETS and India’s National Payments Corporation, which will facilitate offline and online merchant transactions in Singapore and India. At Prime Minister Modi’s suggestion, we successfully organised two Singapore-India Hackathons. The events brought together Singaporean and Indian youths, not only to solve real-world problems, but also to foster a sense of understanding and camaraderie. As former head of our Monetary Authority of Singapore, I am pleased that relations between the Reserve Bank of India and MAS are growing. RBI’s approval for DBS Bank to expand operations, especially in the south of India, will help support businesses on both sides. As we harness the digital economy, we must enable the sharing of data, and avoid data localisation. As more activities go digital as a result of the pandemic, there is even greater impetus to accelerate our efforts to integrate our digital realms, and enable the more seamless flow of data, services and payments. We can then build on this and explore new modes of digital transactions.
COVID-19 has also given a renewed emphasis to build a more environmentally sustainable future. India is committing to reduce emissions intensity by one-third by 2030, and to establish a new National Hydrogen Mission. These will accelerate your transition to a low-carbon economy, and create new opportunities for collaboration. New opportunities can be found in green and net zero buildings, energy and water management solutions, as well as solar energy and green hydrogen. A number of Singapore companies are invested in these areas in India. Agritech also holds much potential. Through improved monitoring and precision farming techniques, farmers can increase their yield and improve their lives.
Urban solutions and agri-tech are also areas of excellence that Singapore is pursuing. With a high-density built environment, we are doing all that we can to make our city more sustainable and liveable. To improve our resilience, we are aiming to grow 30% of our food needs locally. There are many opportunities in urban solutions and agri-tech that businesses in India and Singapore can jointly explore.
More broadly – beyond FinTech and sustainability – we should also explore new frontiers for collaboration. Enterprise Singapore established a Global Innovation Alliance node in Bangalore two years ago, to strengthen exchanges between Singapore and Indian start-ups. Last year, despite the pandemic, Enterprise Singapore helped more than 100 Singapore start-ups enter the India market. Platforms – such as the annual Singapore Week of Innovation & Technology, or SWITCH, and the Singapore Fintech Festival, – provide opportunities for start-ups and businesses to come together, to tackle common challenges and explore new frontiers.
I hope we can deepen collaboration — in FinTech, in sustainability and beyond — as momentum for reform and innovation in India picks up pace.
This brings me to my third and last point. The importance of collaboration to unlock India’s vast potential means that India should consider greater economic integration with the region. As the Indian government has rightly recognised, a self-reliant India is not an insular India. Globalisation has brought huge benefits to the world, including to India, since your liberalisation in the 1990s. As with the experience in most countries, while globalisation is an overall boon, it also comes with costs. If India can address these downsides well — through reform, transformation and attracting new investments — it will be in a good position to ride the post-COVID wave of globalisation. India has an important role to play in contributing to the diversification of the global supply chain and making it more resilient. Indian companies have the capability, scale, and resources to serve more than just its domestic market, huge as it is.
I see tremendous opportunities for India to partner economies in Asia, especially in Southeast Asia. ASEAN and India established the ASEAN-India Free Trade Area more than a decade ago. Since then, two-way trade has almost doubled. The ASEAN-India FTA can continue to serve our collective interests, and we must continue to improve on what we have.
I welcome Minister Piyush Goyal’s “3Cs” of cooperation, collaboration, and commitment, to take ASEAN-India economic ties to the next level. ASEAN and India have many complementary strengths. We should build on these to restore connectivity, and enhance supply chains in the post-pandemic era. ASEAN is also a fast-growing consumer market, with a growing middle class and a population that is increasingly digitally connected. As such, beyond the movement of goods and physical connectivity, it is also important for ASEAN and India to explore ways to enhance digital connectivity. As the incoming ASEAN-India Country Coordinator, Singapore looks forward to working closely with India and fellow ASEAN members to take this key partnership forward.
Beyond the ASEAN-India FTA, another important regional agreement is the RCEP. Comprising all ten ASEAN member states and five other major trading partners, this is the largest agreement of its kind in history. We fully appreciate why India is unable to join the RCEP at this moment. But the door remains open, and we welcome India to do so when you are ready.
Let me wrap up, so that we can go into the dialogue. Prime Minister Modi has undertaken many bold reforms, necessary for India’s longer-term success. From its determination to strengthen domestic manufacturing, to measures to lower barriers for investments, these reforms have put India on a firmer growth trajectory. India managed to attract its highest ever total FDI last year – nearly US$82 billion, despite the pandemic. This shows that global investors remain optimistic about where India’s economy is headed. As the global economy recovers, I am confident that India, with its resilient fundamentals, will bounce back strongly.
In closing, I congratulate the CII team for putting together a very substantive and timely event. I look forward to our dialogue.
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