K Shanmugam, the Singapore foreign affairs and law minister
Singapore, Aug. 21: Stability in political and legal terms, security and availability of land are among the key factors that investors from Singapore will look at before investing in any Indian state, said K. Shanmugam, the minister for foreign affairs and law.
“When they want to invest, they want to know that the investment is safe, which means stability — politically and legally. This means they don’t want to invest and then the rules change. Second, there’s got to be security. If they set up a factory or business and people are attacked, either by street violence or terrorism… they will get worried,” said Shanmugam during an interview to The Telegraph this afternoon.
Earlier in the day, he hosted chief minister Mamata Banerjee at an official luncheon at an Indian eatery in Singapore. During the luncheon, the two sides discussed the possibility of exploring opportunities for mutual co-operation in areas such as urban development, tourism and hospitality, construction and infrastructure industries, entertainment and theme parks.
“Stability in political and legal terms and security and good labour laws and management and the factors of production like land must be available if you are setting up a factory,” Shanmugam said while explaining industry’s wish list.
Shanmugam also referred to the need for quality human resources in technology-intensive ventures.
Although he clarified that a checklist such as this would also exist in the minds of investors putting their money in Singapore, the clear statement on what Singaporean investors are looking at is significant at a time the Mamata government is trying to woo investments from the island state.
Singapore seems to have become the flavour of the season as several Indian states are competing among themselves to draw investments from the country, which was the largest foreign investor in India in 2013. Other than from Bengal, business delegations are also coming from Telangana and Rajasthan, to be followed by those from Andhra Pradesh, Madhya Pradesh, Punjab and Gujarat.
An NRI businessman based here said: “The Singaporean investors will compare the states and do their cost-benefit analysis before taking a call. This means, Bengal will have to match other states.”
Shanmugam, the first Asean foreign minister to visit India after the change of guard in Delhi, said today that traditionally, Singaporean investors have looked at the southern and western states of India as investment destinations.
“I think it’s because of tradition. The parts of the Indian subcontinent that Singaporeans understand best obviously are the places where Indian Singaporeans have come from. That include states like Tamil Nadu, Kerala, Maharashtra, Gujarat, Punjab as well as some others,” the minister said.
“The chief minister tells me that the investment climate in West Bengal has not been number one in India for several years. But she says the place has changed considerably since she became chief minister,” he added.
While addressing a business meeting at Shangri-La Hotel yesterday, the chief minister said her government had effected a turnaround after the regime change in Bengal.
According to Shanmugam, the chief minister apprised him of her success in bringing down the number of strikes in the state and creating a land bank for industry.
“She is very energetic. She is very focused. The main focus of her visit has been to meet with the business people,” said the minister, who talked about the “continuity” in economic relations between India and Singapore that’s on an “upward trajectory”.
Data available with the official agencies here put the value of investments from Singapore in India at 8.5 billion Singapore dollars (around Rs 42,500 crore).
Amid forecasts by researchers in foreign banks that the funds flow from Singapore would increase given the investor community’s confidence in Prime Minister Narendra Modi, Mamata had arrived in Singapore on a five-day trip.
Sources in the state government said that the hope that Bengal — because of its geographical proximity with Singapore that can be reached by air in three and a half hours — can attract a part of the investments prompted Mamata to shed her inhibition about hanging around with people from the world of business and lead a 50-member business delegation. The team also includes actor Dev and film producer Srikant Mohta.
Other than the luncheon, Mamata did not have any major official engagement today. But some officials of the government held meetings with representatives of Singapore-based venture capital funds.