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A partnership on a fast track

Saturday 2 July 2005

It is surely significant that India’s first Comprehensive Economic Cooperation Agreement (CECA) should be signed with Singapore. CECA, which took a full two years to negotiate, is a major landmark in bilateral relations. It also sets the stage for a series of comparable agreements with other countries. Talks with Sri Lanka, Thailand, and Malaysia are in progress, and Prime Minister Manmohan Singh has asked the Trade and Economic Relations Committee to fast-track a comprehensive pact with the Association of South East Asian Nations (ASEAN). The point is that CECA goes well beyond the framework of a Free Trade Agreement (FTA) to cover special visa arrangements, air transport liberalisation, investment, and financial services, to name a few areas. According to current projections, the two-way India-Singapore trade, already at a healthy $ 6.8 billion, is expected to climb to $ 10 billion in a year and to $ 50 billion by 2010. Besides seeking to expand trade, the governments and private sectors of the two countries must step up their efforts to promote investment, share expertise and technology, and work together to penetrate third country markets. Helping as it does to harness the city state’s strategic position and reputation as a financial hub, the partnership should enable India to leverage its strengths and capabilities and channel more investment and market flows into Singapore.

Prime Minister Lee Hsien Loong’s signing of CECA marks the completion of a far-going process set in motion by his sagacious predecessor, Goh Chok Tong, who was among the first Southeast Asian leaders to recognise and highlight the potential of India, way back in 1995. It was Mr. Goh who pushed for India’s graduation as a dialogue partner of ASEAN and then as an invitee to the ASEAN + 4 annual summit. That was followed by the invitation to India to participate in the East Asian Economic Cooperation summit later this year. It is heartening that, in addition to trading firms, hundreds of Indian companies, mostly in software and information technology, have set up business in Singapore. This is essentially at the level of small and medium enterprises, which is also Singapore’s strength. Indian companies should shed their fears and inhibitions on FTAs and CECAs and prepare themselves for global competition. Singapore’s trade and marketing strengths and India’s robust manufacturing and IT base should provide the right mix for making a thrust into new markets. After consolidating CECA, which comes into force on August 1 this year, India must move forward and negotiate similar agreements with strategic partners. Strengthening the partnership with ASEAN and forging closer economic ties with China and Australia, in addition to Japan and the Latin American countries, should also open the door for India to the Asia Pacific Economic Cooperation (APEC) forum.

See online : The Hindu

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