| Ficci president A. C. Muthiah (left) with Singapore Prime Minister Goh Chok Tong in New Delhi on Tuesday. (AFP)
New Delhi, April 8: Singapore today signed an accord promising to set up a free trade arrangement with India.
Singapore Prime Minister Goh Chok Tong told newspersons here that the trade agreement with India will be the first step toward integrating Indian and the Asean markets and open the way for economic interaction between India and China. China has already proposed a free trade pact with the Asean.
“My own vision is for Singapore to serve as a bridge between India and China,” he said, adding the world’s two most populous countries could become the largest economies in 25 years’ time.
“If Singapore can serve as a bridge to facilitate economic interaction between these two giant economies, can you imagine the benefits that will accrue to all three countries'”
Goh, who held discussions with Prime Minister Atal Bihari Vajpayee and his deputy Lal Krishna Advani, on economic and trade issues, besides the menace Asia faced from terrorism, said the two countries will start work on a Comprehensive Economic Cooperation Agreement to include a free trade area, investment promotion and open skies for charter flights.
Singapore, the largest trading centre in Asia, has traditionally acted as a middle-man for trade between east Asia and Europe.
With a well established and sound financial market, the island nation now wants to take on a similar role for trade between India and China which it sees growing.
Singaporean businessmen also see India as a safe haven where they can invest their huge foreign exchange surpluses, provided the ground rules can be cleared up.
At a luncheon meeting organised by the Confederation of Indian Industry (CII) and Federation of Indian Chambers of Commerce and Industry (Ficci), the Singapore Prime Minister told Indian business leaders, who wanted to know how long talks on a free trade area would take, “As fast as India can move; Singapore would press for 12 months, that’s a reasonable target. If both sides show goodwill and are prepared to make difficult trade-offs the target can be met.”
The Singapore government is prepared to set up a $ 1 billion (about Rs 4,800 crore) fund to invest in Indian businesses and infrastructure once the Comprehensive Economic Cooperation Agreement (CECA) between India and Singapore comes into force, he added.
A joint task force of Singapore and Indian officials has already recommended that the planned pact should include a free trade agreement between the two countries, covering trade in both goods and services, an investment agreement which would promote and protect investments by either country’s nationals and streamlining of an existing double taxation avoidance treaty.