OPENING ADDRESS BY MR S ISWARAN, SENIOR MINISTER OF STATE FOR TRADE AND INDUSTRY, AT “THE INDIAN REPUBLIC@60: CHALLENGES AHEAD” CONFERENCE, 23 JANUARY 2009, 1400HRS, AT THE MANDARIN ORIENTAL HOTEL
Dr S Jaishankar, High Commissioner
Mr Sachin Pilot, Member of Parliament, Lok Sabha
Distinguished Guests,
Ladies and Gentlemen,
1Thank you for inviting me to deliver the opening address for this conference – “The Indian Republic @ 60: Challenges Ahead”.
2The last 60 years has seen a remarkable transformation of India’s economy. After gaining independence from the British, the era of the License Raj and the centrally-planned economy of the new republic shunned the outside world and constrained businesses. Ironically it was that very isolation that nurtured the indomitable Indian entrepreneurial spirit and provided the incubator for India’s businesses. India then moved into high gear after undertaking bold economic reforms in the 1990s.From the modest rates of growth of 3 to 4 per cent in the 1990s, India has witnessed an average annual growth rate of 7 per cent in the last 5 years. Today, India is a powerhouse of knowledge-based industries, driven by a services-led economy that is projected to become the 3rd largest economy in the world by 2020.
3India’s influence and importance on the global stage has also grown significantly.It is a leading member of the G20 Group of nations at the WTO and a key player in what we hope will be a successful Doha Round. Closer to home, India is an active dialogue partner of ASEAN, and the ASEAN-India Free Trade Agreement underscores and underpins the importance India places on its relationship with ASEAN.It is also a member of the ARF and East Asia Summit (EAS).There is no doubt that India’s role and influence on the international stage is on the ascent.
4The changes in India, particularly in the past decade or so, have been nothing short of extraordinary.But change is the bearer of both opportunity and challenge.And, India@60, faces domestic as well as external challenges which it must overcome in order to maintain its trajectory of growth.These challenges have economic, social and security dimensions, particularly the threat of terrorism.
India – Challenges for the Future
5On the domestic front, the basic challenges of closing the poverty gap, providing universal access to potable water, utilities, food and amenities, and boosting infrastructure will be more difficult in the current economic environment. The ongoing financial crisis is global in scale and Asia has not escaped unscathed. Whilst fast developing economies in Asia like China and India are still expected to remain in the positive territory this year, overall growth will be slower due to the collapse in world demand.Earlier forecasts of 6.3% GDP growth for India have subsequently been revised down to approximately 5.6%. The Indian government has responded expeditiously and effectively with a series of measures – tax cuts, stimulus package and support for businesses. But, the nature and scope of this economic downturn is unprecedented.As it evolves and runs it course, the challenge for any Government is to keep abreast of the twists and turns, amidst other political imperatives such as general elections, and be nimble and timely in its response.
6A second challenge, which is more global in dimension, is terrorism. The terrorist attacks in Mumbai in November 2008 are stark reminders of how vulnerable we all are.The trans-national nature of terrorism calls for a concerted national and international effort to quell the rising tide of this heinous threat.
India: Regional Cooperation and Beyond
7Let me move on to the topic of India’s role in the region.For the last two millenia, South East Asia, situated at the crossroads between China and India, has played an important role in the development of trade, as well as cultural links, between India and China.Singapore, in particular, has benefited immensely from the Indian migration and trade. Today Singapore’s ethnic Indian community, which comprises 7% of our population, has been given added colour and vibrancy with the arrival of a new wave of migrants of Indian origin.Together, they have and continue to contribute much to Singapore’s development and heritage, while maintaining their ties to India.
8The ties which were established centuries ago, when we were part of the Indianised kingdoms of Srivijaya and Majapahit, have laid the foundation for our political, economic and social ties today.It is therefore fitting that India is an active dialogue partner of ASEAN.ASEAN’s efforts in engaging India were bolstered by India’s timely Look East policy, a recognition by India of the need to deepen its engagement with the Southeast and East Asian regions. India is now ASEAN’s seventh largest trading partner, and India’s Foreign Direct Investments into ASEAN stood at US$641 million in 2007, the highest level recorded since 2000. ASEAN and India have also concluded negotiations for a Trade in Goods agreement under the ASEAN-India Free Trade Agreement (AIFTA). Negotiations have also begun on the Trade in Services and Investments, and the target is for the substantive conclusion of both agreements by the end of this year. The AIFTA will link and integrate India with ASEAN as well as the competitive East Asia region and will be a milestone in India’s Look East policy.
9India has also increased its efforts to actively engage the region in areas such as maritime security and climate change.On the former, the deployment of Indian Navy vessels for anti-piracy patrols in the Gulf of Aden further demonstrates India's willingness to shoulder its share of the international burden that is commensurate with its size and stature. Singapore also looks forward to India's active contribution in addressing the global issue of climate change, a long-term issue whose solution equally requires the long-term commitment of every country in the world, big or small.
Singapore and India Relations – Strengthening and Growing Ties
10On the bilateral front, our relations have never been better.On the G-to-G level, we have established several mechanisms such as the Joint Ministerial Committee and Singapore-India Strategic Dialogue to step up engagement at various levels.
11However, it is the Comprehensive Economic Cooperation Agreement (or CECA) that epitomises the depth and breadth of Singapore-India relations. Since the CECA was signed in 2005, bilateral trade has seen a steady increase of more than 20% every year, making India Singapore’s fastest growing trade partner. Last year, despite the global economic downturn, total bilateral trade stood at S$28.8 billion, up 20% from the previous year.
12Singapore companies have also been investing actively in India. Singapore is now the second largest investor in India, with FDI standing at US$3.41 billion (Jan – Sep 2008 figures). Singapore’s share of FDI also increased from 7.3% to 11.6%. And the investment flow is bilateral.Increasingly, Indian entrepreneurs have also identified Singapore as an important gateway for them to venture overseas, not just to the Asian region but also to the rest of the world.Currently, more than 3,600 Indian companies have established their presence in Singapore.
13Although relations between Singapore and India have grown exponentially, the potential for further and deeper engagement remains substantial.India is a compelling market and value proposition for Singapore companies.Today, despite the global downturn, India remains one of the two bright spots in Asia.And this year, IE Singapore will mount even more trade missions to India to seek out new business opportunities for Singapore companies. We also hope to launch the 2nd CECA Review, which will go further to enhance trade and investment flows between our two countries. We believe that notwithstanding significant strides in recent times, there remains significant untapped potential for cooperation between Indian and Singapore companies.
Conclusion
14In its 60 years as a Republic, India has made an indelible impact on the world.In more recent times, India’s influence has grown somewhat exponentially with its rise as an economic powerhouse.Whilst India does face significant challenges to sustain its growth and developmental trajectory, its prodigious pool of talent combined with political will is more than equal to the task.India’s continued engagement is crucial to the continued stability and progress of the region – and Singapore remains India’s abiding partner in this endeavour.
15In closing, let me take the opportunity to extend my warmest congratulations to the Republic of India on the auspicious occasion of India’s 60th Republic Day. I also wish all of you a very fruitful session.