NOW A â€˜CATALYSTâ€™ IN GLOBAL BUSINESS
Singapore India Chambers of Commerce is coming out with innovative methods by helping the trade between India and China. In this article we are examining how regional co-operation in South East Asia is enhancing business propositions and trade ties.
Singapore is well-poised to act as a middleman in Sino-India trade, Singapore Indian Chamber of Commerce and Industry. The chairman of Singapore Indian Chambers of Commerce was in Mumbai, the commercial capital of India, recently with a large delegation of more than 50 businessmen eager to forge ties in India, the intention was to make it work both ways and Singapore would also help Chinese companies do business in India.
It can be called as a growth of middleman economies. Even as China remains one of the most lucrative markets, companies often find it hard to navigate. This is the exact reason the two prominent regional trade hubsâ€”Hong Kong and recently Singapore â€“are keen to position themselves as a gateway to China.
India-Singapore trade has been on the rise since the 1990s when former Prime Minister Goh Chok Tong said that he wished to inject Singapore with India fever. It is from that time Singapore has emerged as Indiaâ€™s third-largest trading partner, while India was Singaporeâ€™s 13th largest trading partner. Indo-Singapore bilateral trade stood at $16.6 billion last year and Singapore has made cumulative investments of $940 million in India so far. Indian companies could also leverage the network of free trade agreements (FTA) Singapore has with other nations like Japan, Korea and the European Union.
Around 1,600 Indian companies are operating out of Singapore, mostly in the It sector and the rest in manufacturing. Most of them use Singapore as a base to trade with other countries. However, despite the two nations signing a Comprehensive Economic Co-operation Agreement (CECA) in 005, concrete results are yet to be seen. The rush of trade hasnâ€™t happened as expected because it is Indiaâ€™s first such FTA. Even now many ongoing investments are still being routed through Mauritius.
Trade Policy of Singapore:
Singapore firmly believes WTO provides the framework for developing sound multilateral rules to ensure countries remain open to international trade. For this reason, IE Singapore, as the lead agency on WTO issue, places the highest priority on the continued viability of the multilateral trading system.
China’s accession to the world trade body is clearly of great interest to Singapore, given the Republic’s close and significant trade connection with China. During the accession negotiations, to ensure that Singapore’s business community reaps commercial benefits, IE Singapore, on behalf of the Republic, negotiated with China for concession in key goods and services – including electronics goods, and financial and telecommunication services. All of the request were acceded to and even surpassed. China’s commitment to greater market access, and to international trade rules spell greater trading and investment opportunities for Singaporean businesses.
It is on this positive note that the Trade Policy Division and accompanying was realigned administratively. This is intended to ensure synergy and greater effectiveness in Singapore’s policy formulation and implantation with which it is able to act as a catalyst for business promotion between India, China , Hongkong and other Asian countries.
Most Liberal Trade Barriers:
In general, Singapore maintains one of the most liberal trading regimes in the world. However, there are trade barriers in several sectors, including broadcasting, news media, domestic retail banking, legal services, professional engineering and architectural services, accounting and tax services, and insurance. The Government is slowly allowing more freedom for market forces in the economy as can be seen in its move to liberalize the telecommunications, power, financial and legal services industries. In the area of intellectual property rights, the Singapore Government does have laws to protect against piracy and copyright infringement, but it relies on the private sector IPR associations to take the lead against transgressors.
When a Singapore company/agent imports goods on behalf of an overseas non-taxable person who has no business establishment in Singapore, the Singapore company will be treated as the principal importing the goods, irrespective of whether the Singapore company calls itself an agent or not. The Singapore company must pay GST Input Tax to Customs and Excise Department.
Temporary Goods Entry Requirements:
For goods entering Singapore on a temporary basis, companies may apply for an ATA Carnet with the Singapore International Chamber of Commerce. The ATA Carnet serves as a guarantee against payment of import duties/taxes should the temporary admission period be exceeded. Goods imported under a carnet may not be sold and must be re-exported within the temporary admission period. If the items to be imported are subject to controls, companies must obtain endorsement/approvals from the relevant Government agencies before importing the goods into Singapore.
Free Trade Agreements (FTA):
There has been a distinct increase in the level of free trade agreement (FTA) activities in the last one to two years. While Singapore continues to put primary emphasis on the multilateral trading system, it also welcomes and participates in the shift to use FTA to amplify the twin effects of growing trade and investment. The surge in bilateral and regional trade effort can enhanced inter- regional trade flows, spur domestic reforms and create a positive ratcheting effect on the pace and depth of multilateral work as long as the FTA are WTO-consistent, WTO-plus and based on open regionalism.
In all of these FTA negotiations, IE Singapore was appointed the lead agency in key areas such as trade in goods, rules of origins and services. Consultations were held with the business community and feedback included in the negotiations to ensure commercial relevance.
Singapore has concluded FTA with inia, New Zealand, Japan and the EFTA countries. Negotiations are also ongoing with several other strategic trade partners, especially the US, Australia, Canada and Mexico. Singapore with all its strategies and efforts mentioned above is likely emerge as the middle-man between China and India . Rather than competing with each other China and India will play complimentary roles and the volume of trade between the two is bound to rise.