The Hindu : Business : CECA with Singapore will boost investment, says Chidambaram

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Thursday, Jun 30, 2005

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Business

CECA with Singapore will boost investment, says Chidambaram

Special Correspondent

Assocham study forecasts substantial benefit for infrastructure sector

UPBEAT ON ACCORD: The Prime Minister of Singapore, Lee Hsien Loong (right), with the Union Finance Minister, P. Chidambaram, during a meeting in New Delhi on Wednesday. — PTI Photo

NEW DELHI: The Comprehensive Economic Cooperation Agreement (CECA) with Singapore will lead to a larger flow of investment into India as the Asian giant is a major global hub for trading and manufacturing, the Union Finance Minister, P. Chidambaram, said here on Wednesday.

Speaking to newspersons after calling on the Prime Minister of Singapore, Lee Hsien Loong, who is here on a visit to ink the historic accord, Mr. Chidambaram said: "We are all happy that we are entering into CECA... Singapore offers a large basket of financial services which can be leveraged to channel investment to India.''

"Prime Minister [Lee] told me that after CECA, one can expect a larger flow of investment from Singapore and through Singapore,'' he said.

Bilateral trade

The signing of the CECA will pave the way for bilateral trade to touch $10 billion by the end of this fiscal and $50 billion by 2010 against $8 billion at present, a study by the Associated Chambers of Commerce and Industry of India (Assocham) says.

Releasing the study, the chamber President, M. K. Sanghi, said the CECA would also significantly increase Singapore's investments in India.

The study says investments from the ASEAN member nations were expected to go up to $5 billion by 2010 and further to $10 billion by 2015. The most important areas of Singapore's investment in India would be airports, ports, urban infrastructure, it says, while adding that there is also a vast potential for cooperative ventures in biotech, healthcare, food processing, animation, entertainment and tourism.

The agreement will help Indian businesses leverage Singapore's strengths in finance and marketing and achieve greater competitiveness in information technology through closer ties with Singapore's advanced electronic industry.

"More than 300 Indian IT companies have already set up software development operations in Singapore and there are about 1500 Indian companies which have bases in that country while every year around 150 new companies set up their operations,'' Assocham says.

Therefore, it maintains Singapore will witness the fastest growth of Indian companies, setting up their operations with the execution of CECA.

The number of these will multiply to perform a wide range of business activities from R&D to manufacturing, establishing supplier chain management, intellectual property management and strategic management, it says.

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