PRIME MINISTER’S VISIT TO SINGAPORE

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Context:

The Prime Minister of India's visit to Singapore aims at strengthening collaboration in the semiconductor sector.

Details

• The Indian Prime Minister's recent visit to Singapore is an important milestone in India's ambition to become a major player in the global semiconductor industry.
• Semiconductors are the tiny chips that power everything from smartphones to advanced weapon systems.
• They are the critical components of modern economies and technological developments.
• A Memorandum of Understanding (MoU) was signed between both the leaders to strengthen partnerships in the semiconductor sector. 
• The MoU represents a strategic move by India to enhance its semiconductor industry which is important for various high-tech sectors.

Success Story of Singapore in the Semiconductor Sector

• During the 1970s, the Prime Minister of Singapore started taking initiatives to attract semiconductor industries. 
• By the early 1980s, the semiconductor industry had become an integral part of Singapore's economy, contributing about 7% of its Gross National Product (GNP).
• Currently, Singapore produces about 10% of the world's semiconductor output.
• The strategic location of Singapore, its infrastructure and a well-educated skilled workforce have made it a hub for semiconductor manufacturing and innovation. 

Lesson for India from the Singapore’s Success in the Semiconductor Industry

• Singapore has developed a specialised wafer fabrication park that provided the necessary infrastructure for semiconductor manufacturing.

• • • Universities in Singapore played an important role in developing talented skilled workers for the semiconductor industry.

• They offered specialised programs in microelectronics and collaborated with industry leaders on research and development around the globe. 

• A stable business ecosystem and strategic location are critical to attract Semiconductor firms. 

Challenges and opportunities

• High production costs and limited resources in Singapore have led some companies to move operations to more cost-effective locations.
• This presents an opportunity for India to attract semiconductor companies that are looking to diversify their production base.
• India's cost advantages in labour and land could be attractive to the semiconductor industry for expansion.

About India-Singapore Relations

• India was one of the first countries to recognize Singapore after its independence in 1965.
• In 2015, the bilateral relationship between India and Singapore was upgraded to a strategic partnership.
• In 2023, the UPI-PayNow cross-border payment linkage was launched between India and Singapore.
• The First India Singapore Ministerial Roundtable was held in 2022. It focused on digital connectivity, green economy and skill development.
• The second India-Singapore Ministerial Roundtable was organised in 2024, to strengthen cooperation in manufacturing and connectivity. 

Economic Relation

• Singapore is India's largest trade partner within ASEAN.

• • • In 2023-24, Singapore was the largest source of foreign direct investment (FDI) for India, contributing around $11.7 billion. 

• Bilateral trade has increased from $6.7 billion in 2004-05 to $35.6 billion in 2023-24. 

Scientific and Technological Corporation

• Indian Space and Research Organization (ISRO) has launched multiple satellites of Singapore, including their first indigenously built micro-satellite. 
• India and Singapore have conducted workshops on digital health and medical technologies and Co-hosted the ASEAN India Women's Scientists conclave in 2024. 

Cultural Relation

• The Indian community in Singapore consists of around 9.1% of the resident population and contributes actively to various sectors such as finance, IT and construction. 
• Tamil is one of Singapore's official languages and Indian languages such as Hindi, Gujarati, Urdu, Bengali and Punjabi are also taught in schools. 

Challenges in India-Singapore relations

• Competition between Indian and Singapore firms, especially in sectors like financial services and technology can create friction. 
• Indian companies face bureaucratic red tape in Singapore, while Singapore firms struggle with India's complex regulatory environment, especially regarding taxation and business registration. 
• Integrating India's rapidly growing fintech sector with Singapore's more developed fintech sector can be challenging. 
• Collaboration in high-tech industries such as artificial intelligence, quantum computing and cyber security is still in the initial stage. 

• • • A lack of joint research and development in advanced technologies could hinder long-term strategic gains. 
• Labour migration policies in Singapore sometimes pose challenges for Indian professionals.

Way Forward

• Strengthen India Singapore Comprehensive Economic Cooperation Agreement (CECA) by addressing sector-specific challenges.
  • • This will create a simplified process for business approvals and easing cross-border investment flows.
• Both nations should establish deeper cooperation in emerging technologies like artificial intelligence, blockchain and quantum computing, through joint research and development. 
• India and Singapore can collaborate more closely on cybersecurity, maritime security and counterterrorism. 
  • • Singapore's advanced cyber defence infrastructure and India's growing cybersecurity expertise can complement each other in safeguarding critical infrastructures. 
• Promoting cultural exchange programs, student exchanges, and bilateral tourism initiatives can strengthen people-to-people contact. 
• Both countries can work together in regional platforms like ASEAN and the International Solar Alliance to address global challenges such as climate change, renewable energy and sustainable development.
• Expanding cooperation in green energy through projects focused on green hydrogen, renewable energy and sustainable Urban Development will benefit both nations.
• Establishing more skill development centres with Singapore's expertise will help India to develop a skilled workforce.
• Developing infrastructure and connectivity projects to enhance maritime and air connectivity will help both nations.
• Encouraging joint ventures and public-private partnerships in sectors like advanced manufacturing, biotechnology and healthcare technologies will boost economic cooperation and also create job opportunities in both countries. 

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Source: 

Indian Express

Wikipedia

High Commission of India in Singapore