India should consider greater economic integration with Southeast Asia, including through the Regional Comprehensive Economic Partnership (RCEP), to unleash the country’s full potential, Singaporean Deputy Prime Minister Heng said on Wednesday. Sweet Keat.
Heng, who is also the minister in charge of economic policy coordination, made the remarks during the opening session of the virtual annual meeting of the Confederation of Indian Industry amid concerns from South Asian countries. South East regarding the lack of concentration of India’s economic ties with the region.
He noted that the Indian government has itself recognized that “a self-governing India is not an island India”, and said that “the door remains open” for India to join RCEP when ready. . At the same time, Heng said, India has an important role to play in helping to diversify the global supply chain and make it more resilient.
Heng made three major points in his speech – India-Singapore relations have been propelled by milestones such as the signing of the Comprehensive Economic Cooperation Agreement (CECA) in 2005, the potential for collaboration in new areas such as fintech and sustainability, and the importance of collaborating with Southeast Asia.
“The importance of collaboration in unlocking India’s vast potential means that India should consider greater economic integration with the region,” he said. While acknowledging that globalization has costs, Heng said if India could deal well with “these downsides – through reform, transformation and attracting new investment – it would be in a good position to ride the wave of post-Covid globalization”.
Describing RCEP as an “important regional agreement”, Heng said it includes the ten members of the Association of Southeast Asian Nations (ASEAN) and five major trading partners and is of the “largest such agreement in history”. He added, “We fully understand why India is unable to join RCEP at this time. But the door remains open, and we invite India to do so when you are ready.
ASEAN and Australia, China, Japan, New Zealand and South Korea signed RCEP last November. Japan led the drafting of a declaration that left the door open for India to join the world’s largest trading bloc, covering almost a third of the global economy, at a later stage. Indian officials said the country did not join RCEP because it would have had negative consequences, including China using the trade deal to gain unfettered access to India’s vast market at the expense of micro, small and medium-sized businesses. businesses (MSMEs), farmers and start-ups.
Heng argued that the campaign for a self-reliant India was also about building a “stronger and more cohesive” country and said India needed to work with partners beyond its shores in a world disrupted by Covid-19.
“India has an important role to play in helping to diversify the global supply chain and make it more resilient,” he said. “Indian companies have the capacity, scale and resources to serve more than their home market, however huge that may be.”
He said there are huge opportunities for India to partner with Southeast Asian economies, with the ASEAN-India Free Trade Area established more than a decade ago helping to nearly double bilateral trade. “ASEAN and India have many complementary strengths. We must build on these elements to restore connectivity and improve supply chains in the post-pandemic era,” he said.
Heng, who was Singapore’s chief CECA negotiator, also said Singapore was India’s biggest source of FDI in recent years, with direct investment increasing 50-fold to $45 billion. He also highlighted recent cooperation between the two sides on the Covid-19 response, including India keeping the supply chain of essential goods open at the start of the crisis, and Singapore sending oxygen-related supplies when India has seen its second wave of infections.