India Singapore Relations In 2025

In 2025, India and Singapore are solidifying their relationship, building upon their Comprehensive Strategic Partnership established in the previous year. Singapore is India’s largest trade partner within ASEAN and its sixth-largest globally. They have a Comprehensive Economic Cooperation Agreement (CECA) in place, with India being a net importer. A Direct Tax Avoidance Agreement (DTAA) helps prevent tax evasion. Singapore was the largest source of Foreign Direct Investment (FDI) into India in 2023-2024. Military cooperation includes joint exercises. A significant initiative is 'Project Nexus,' a collaborative effort to enable fast cross-border payments by connecting India's Unified Payments Interface (UPI) with payment systems in Singapore, Malaysia, the Philippines, and Thailand. Both nations are members of multilateral organizations such as the East Asia Summit, G20, Commonwealth, IORA, and IONS. Singapore has also joined the International Solar Alliance and the Global Biofuel Alliance.

India-Singapore Relations in 2025

The year 2025 marks a continued evolution of the robust and multifaceted relationship between India and Singapore, characterized by deepening economic ties, strategic alignment, and collaborative initiatives across various sectors. This builds upon the foundation laid by the Comprehensive Strategic Partnership established in 2024, a framework designed to foster closer cooperation in areas critical to both nations' interests. The trajectory of this relationship is significant, not only for the bilateral benefits it generates but also for its implications within the broader context of India's "Act East" policy, its engagement with ASEAN, and its increasing role in the Indo-Pacific region.

Economic Interdependence: Trade, Investment, and Agreements

At the heart of the India-Singapore relationship lies a strong economic partnership. Singapore stands as a pivotal economic partner for India, particularly within the ASEAN framework. In 2025, Singapore remains India's largest trade partner within ASEAN and the sixth-largest globally. This underscores the significant volume of trade flowing between the two nations and highlights the importance of Singapore as a gateway for India into the broader Southeast Asian market. The trade relationship is facilitated by the Comprehensive Economic Cooperation Agreement (CECA), a landmark agreement signed in 2005. CECA has played a crucial role in reducing tariffs, liberalizing trade in goods and services, and promoting investment flows between India and Singapore. The agreement encompasses a wide range of sectors, including manufacturing, information technology, and financial services. While India is a net importer from Singapore, the CECA has been instrumental in providing Indian businesses with access to a sophisticated market and fostering competition, which, in turn, drives innovation and economic growth. The agreement is regularly reviewed to ensure its effectiveness and to adapt to changing economic realities.

Beyond trade, Singapore is a major source of Foreign Direct Investment (FDI) into India. In the fiscal year 2023-2024, Singapore was the largest source of FDI, reflecting the confidence of Singaporean businesses in the Indian economy and its growth potential. This investment spans various sectors, including infrastructure, technology, and real estate. The influx of FDI from Singapore contributes significantly to India's economic development, providing capital, technology transfer, and management expertise. The Indian government has implemented various policies to attract and facilitate FDI, including streamlining approval processes and improving the ease of doing business. The consistent flow of investment from Singapore is a testament to the success of these initiatives and the strong economic fundamentals of the Indian market.

A critical element supporting the economic relationship is the Direct Tax Avoidance Agreement (DTAA), signed in 2016. This agreement aims to prevent tax evasion and double taxation of income earned by residents of both countries. The DTAA provides clarity and certainty to investors, reducing the risk of being taxed twice on the same income. By preventing tax avoidance, the agreement promotes investment and encourages businesses to operate across borders. The DTAA is a crucial tool for fostering a conducive environment for cross-border trade and investment, and it reflects the commitment of both countries to upholding international standards of financial transparency and cooperation. The effectiveness of the DTAA is continuously monitored and updated to address emerging challenges and ensure its relevance in a rapidly evolving global economic landscape.

Strategic Alignment and Defense Cooperation

The relationship between India and Singapore extends beyond economic cooperation to encompass a strong strategic partnership. Both nations share a common interest in maintaining regional stability, promoting a rules-based international order, and combating terrorism and other transnational threats. This strategic alignment is reflected in their close cooperation in defense and security. The Comprehensive Strategic Partnership provides a framework for enhanced collaboration in these areas.

Military cooperation between India and Singapore is robust and multifaceted. The two countries regularly conduct joint military exercises, including Exercise Agni Warrior (Army), Exercise SIMBEX (Navy), and joint air force training. Exercise Agni Warrior, a joint military exercise between the Indian Army and the Singapore Army, focuses on enhancing interoperability, sharing best practices, and developing a common understanding of military tactics and procedures. These exercises provide valuable opportunities for both armies to train together and improve their operational effectiveness. Exercise SIMBEX, a naval exercise between the Indian Navy and the Singapore Navy, is a key component of their maritime cooperation. SIMBEX allows both navies to conduct complex naval operations, including anti-submarine warfare, surface warfare, and maritime security operations. These exercises are crucial for enhancing the capabilities of both navies and promoting interoperability in the maritime domain. Joint air force training involves personnel from both air forces engaging in training exercises, further strengthening their capabilities and promoting a common understanding of air operations. These joint exercises and training initiatives are crucial for enhancing mutual trust and understanding, strengthening interoperability, and contributing to regional security.

The defense relationship is further strengthened through regular high-level dialogues, joint research and development projects, and exchanges of personnel and expertise. Both countries share intelligence and collaborate on counterterrorism efforts. The strategic partnership is a key pillar of their bilateral relationship, reflecting their shared commitment to maintaining peace and stability in the Indo-Pacific region. This strategic alignment is particularly important in the context of the evolving geopolitical landscape, where both nations are navigating complex challenges and seeking to promote their respective interests.

Financial Innovation and Digital Connectivity: Project Nexus

One of the most innovative and forward-looking initiatives in the India-Singapore relationship is Project Nexus, a collaborative effort aimed at enabling fast and efficient cross-border payments. This project is a testament to both countries' commitment to fostering financial innovation and enhancing digital connectivity. Project Nexus involves linking India's Unified Payments Interface (UPI) with payment systems in Singapore, Malaysia, the Philippines, and Thailand. The UPI is an instant real-time payment system developed by the National Payments Corporation of India (NPCI), facilitating inter-bank transactions. It has revolutionized the digital payments landscape in India, enabling users to make instant payments using their mobile phones. Project Nexus will allow users in India to make payments to merchants and individuals in Singapore, Malaysia, the Philippines, and Thailand, and vice versa, seamlessly and securely. The project is supported by the Bank of International Settlements (BIS), which provides technical assistance and facilitates coordination among the participating countries.

The implementation of Project Nexus involves a complex process, including the agreement on technical standards, security protocols, and regulatory frameworks. The participating countries are working closely with the BIS to ensure that the project complies with international best practices and adheres to the highest standards of security and interoperability. The project is expected to have a significant impact on cross-border trade, tourism, and remittances. It will reduce transaction costs, increase the speed of payments, and enhance the overall efficiency of financial transactions. This will benefit businesses, consumers, and migrant workers, making it easier and more affordable to send and receive money across borders. Project Nexus is a pioneering initiative that demonstrates the commitment of India and Singapore to embracing digital innovation and promoting financial inclusion. It has the potential to serve as a model for other countries seeking to enhance their cross-border payment systems.

Multilateral Engagement and Global Partnerships

India and Singapore are active members of numerous multilateral organizations, which provide platforms for cooperation on a wide range of global issues. Both countries are members of the East Asia Summit, a forum of 18 East Asian countries that meets annually to discuss strategic and economic issues. The East Asia Summit provides an important platform for India to engage with regional partners and contribute to discussions on regional security, economic integration, and sustainable development. Both nations are also members of the G20, an international forum comprising the world's major economies. The G20 plays a crucial role in coordinating policies on global issues, including economic stability, climate change, and sustainable development. The Commonwealth, an intergovernmental organization of 56 member states, also includes both India and Singapore. The Commonwealth promotes cooperation and development among member states, focusing on areas such as democracy, good governance, and sustainable development.

In addition to these, India and Singapore are also members of the Indian Ocean Rim Association (IORA), a regional grouping aimed at strengthening cooperation and dialogue in the Indian Ocean region. IORA focuses on promoting maritime security, trade and investment, and sustainable development in the Indian Ocean region. Both nations are also participants in the Indian Ocean Naval Symposium (IONS), a voluntary initiative among navies of the Indian Ocean region. IONS promotes cooperation and understanding among navies in the Indian Ocean through information sharing, joint exercises, and other collaborative activities.

Singapore has also joined the International Solar Alliance (ISA), an initiative launched by India to promote solar energy. The ISA aims to mobilize resources and technology to accelerate the deployment of solar energy in developing countries. Singapore's participation in the ISA reflects its commitment to renewable energy and its support for India's leadership in this area. Furthermore, Singapore is a member of the Global Biofuel Alliance, reflecting both countries’ commitment to renewable energy. The Global Biofuel Alliance is a collaborative initiative to promote the use of biofuels as a sustainable alternative to fossil fuels.

Historical Context and Evolution of the Relationship

The relationship between India and Singapore has a long and rich history, rooted in shared cultural and historical ties. Singapore's strategic location at the crossroads of major shipping lanes has made it a significant trading partner for India for centuries. After India's independence in 1947, Singapore and India established formal diplomatic relations, which have steadily grown stronger over the decades. The relationship gained momentum with India's economic liberalization in the early 1990s, which opened up new opportunities for trade and investment.

The signing of CECA in 2005 marked a significant milestone in the bilateral relationship, transforming it into a comprehensive economic partnership. This agreement laid the foundation for closer cooperation in trade, investment, and other areas. The subsequent years have witnessed a deepening of the strategic partnership, with increased cooperation in defense, security, and other strategic areas. The establishment of the Comprehensive Strategic Partnership in 2024 reflects the commitment of both countries to further strengthen their ties and address a wide range of issues of mutual interest.

India's "Act East" policy, launched in the early 1990s, has been a crucial factor in shaping its relationship with Singapore and other Southeast Asian nations. The "Act East" policy aims to enhance India's engagement with the countries of East Asia, focusing on economic, strategic, and cultural ties. Singapore has been a key partner in this policy, providing India with access to the ASEAN market and serving as a significant source of investment. The "Act East" policy has contributed to the overall growth and development of the India-Singapore relationship, strengthening economic ties, strategic alignment, and cultural exchanges.

The evolution of India's foreign policy from non-alignment to strategic partnerships has also played a role in shaping its relationship with Singapore. In the post-Cold War era, India has adopted a more pragmatic approach to foreign policy, focusing on building strategic partnerships with countries that share its interests. Singapore, with its strategic location, strong economy, and shared values, has become a natural partner for India in this endeavor. The strategic partnership is a key pillar of India's foreign policy, contributing to its regional and global influence.

Stakeholder Positions and Interests

The India-Singapore relationship is driven by a convergence of interests and strategic priorities. India's primary interest is to enhance economic ties, attract investment, and strengthen its strategic partnership with Singapore. India seeks access to the ASEAN market, which is facilitated by Singapore's role as a regional hub. India also benefits from the investment, technology transfer, and management expertise that Singaporean businesses bring to the Indian economy. India's actions, such as signing CECA, DTAA, participating in military exercises, and promoting Project Nexus, are all aimed at achieving these objectives.

Singapore, on the other hand, seeks to maintain strong economic and strategic ties with India, which are crucial for its economic growth and regional influence. Singapore benefits from the growing Indian economy, which provides opportunities for trade and investment. Singapore also sees India as a key partner in promoting regional stability and a rules-based international order. Singapore's actions, such as investing in India, participating in military exercises, and supporting Project Nexus, are all aimed at achieving these objectives. Both countries recognize the importance of a strong and stable bilateral relationship for their respective national interests.

Broader Implications and Future Outlook

The India-Singapore relationship has significant broader implications for the region and the world. The strengthening of India's influence in Southeast Asia, facilitated by its close ties with Singapore, contributes to regional stability and prosperity. The enhanced military cooperation between the two countries contributes to regional security. The promotion of digital payments and fintech innovation through Project Nexus sets an example for other countries seeking to enhance their financial integration and cross-border transactions.

The future outlook for the India-Singapore relationship is positive. Continued growth in trade and investment, further collaboration in fintech and defense, and closer alignment on regional and global issues are all expected. The two countries are likely to explore new areas of cooperation, including renewable energy, climate change mitigation, and sustainable development. The strengthening of the India-Singapore relationship is a testament to the enduring value of partnership and cooperation in a rapidly changing world. The two nations are well-positioned to continue to build on their successes and contribute to a more prosperous and stable future for the region and the world.