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India - Singapore - Relation

History of India – Singapore - Relation

India and Singapore share long-standing cultural, commercial and strategic relations.  Singapore was being a part of the “greater India” cultural and commercial region.  More than 30 lakh people of Indian origin live in Singapore. 

After its independence in 1965, Singapore was concerned with a- backed communist threats from Malaysia and Indonesia. It sought a close strategic relationship with India. 

Singapore has always been an important strategic trading partner, giving India trade access to the far east. India and Singapore's  relationship expanded significantly in the 1990s after India adopted “Look east policy” to expand its economic, cultural and strategic ties in south Asia. India intended to strengthen its position. 

India- Singapore Trade
Singapore is second largest trading partner of India within ASEAN.  India is trading partner of Singapore in south Asia with bilateral trade of US 17.7$ Billion according to the data of  2017-2018. India had trade surplus of 2.73$ US billion with Singapore 2017.

Comprehensive Agreement Covering Trade CECA
CECA was first comprehensive agreement covering trade in goods, services and investment signed by India with any of its trading partners. It was signed in June 2005 and its first review was concluded in October 2017.

The second reviews were started in May 2010. In closing second review, India and Singapore has successfully reached at mutual understanding and agreement. 

They also agreed to expand coverage of tariff concessions. They liberalized rules of origin, rationalized product specific rules and included provisions on certificate of origin and cooperation on its verification. These measures will further facilitate trade between India and Singapore and improve utilization of CECA.

India and Singapore Protocol
The Indian government and Singaporean government on December 30, 2016, signed a protocol amending the India Singapore tax treaty. The protocol introduces key changes to the treat such as:
1.      Sourced- based taxation of capital gains from the transfer of shares acquired on or after 1 April 2017.
2.      A corresponding tax adjustment mechanism to prevent economic double taxation, and
3.      Application of domestic laws to curb tax avoidance or tax evasion.

       The protocol has signed and entered into force on April 1, 2017.

Recently India-Singapore sign second protocol amending CECA
It will help to boost bilateral trade between India and Singapore. It formally brings to closure negotiations on second review of CECA. It will give effect to provisions agreed between India and Singapore during closure of second review of CECA.