<div>It is estimated that there are as many as 4,500 Indian companies present in Singapore whoo have invested $ 14.11 billion between 2008-09 and 2011-12 in Singapore, according to the RBI. As the International Director (Asia Pacific) of the Singapore Economic Development Board (EDB), <strong>Lee Eng Keat</strong> oversees EDB's engagement of companies in the Middle East, South Asia, South East Asia and Oceania (central islands of the Pacific Ocean). In an email interview with BW| Businessworld Online's <strong>Alokita Datta</strong>, Keat talks about why India Inc can benefit from establishing a corporate head office in Singapore, cementing trade links between the two countries, the fillip to R&D activity in pharma and biotechnology as well as the possible investment opportunities where Indian companies should cash in . <br /><br /><strong>What are the competitive advantages Singapore offers (as opposed to other countries in the region) to an Indian company setting up their Asian headquarter?</strong><br />Singapore offers a pro-business trusted environment from which Indian companies can manage their international business. It provides the necessary financial infrastructure to manage Indian companies' international financing requirements. The business environment is built upon policy transparency and a strong legal framework. Finally, its location, strong air and sea links and extensive network of double taxation avoidance agreements and free trade agreements facilitates Asian companies accessing global markets and vice versa. <br /><br />As an international financial hub, Singapore offers sophisticated financing solutions, backed by strong financial infrastructure that allows fund raising and support from international banks. Singapore is AAA rated which in turn lowers the cost of trade financing<br /><br />Recently, the Singapore branch of the Industrial and Commercial Bank of China (ICBC) has been appointed as a clearing house for renminbi (RMB). Singapore is therefore the 2nd clearing centre for the Renminbi, This will enable Singapore's financial centre to play a useful role in facilitating greater use of the RMB for trade and investment in the region. As Indian companies seek to tap the Chinese market, Singapore will be a gateway to facilitate their investments.<br /><br />Singapore is also seen as a neutral location for arbitration (an estimated 25 per cent of disputes heard by the Singapore International Arbitration Centre are between 2 companies of Indian origin), which is why companies from around the region are willing to use Singapore as the seat of arbitration for the contracts that they sign.<br /><br />With respect to business connectivity, Singapore's vast treaty network of 69 DTAs, 35 IGAs and 18 FTAs (with 6 upcoming) benefits companies. This encourages companies to use the country as a hub for trading their goods and services. It also serves as a base to hold and manage their international investments.<br /><br /><strong>While many Indian firms continue to be present in Singapore, how many of them focus R&D activities in Singapore? </strong><br />Indian IT companies partner their clients and Singapore research institutions and universities to establish R&D teams that develop globally-exportable solutions. These companies invest in new technology areas, for instance, big data, analytics and mobility or build up vertical domain expertise in Singapore to differentiate themselves globally. Some examples include: <br /><br />Tata Consultancy Services'(TCS) has their Asia-Pacific HQ (which employs 500 people), Banking Technology Centre of Excellence and a partnership with SMU for an (intelligent city) iCity lab to develop new standards for urban development. HCL Technologies set up its Global Enterprise Mobility Lab in Singapore, doubling its headcount in 18 months.<br /><br />L&T Infotech had opened its Wealth Management CoE to develop new technologies for its BFSI clients.<br /><br />In the pharmaceuticals and biotech sector, companies can partner Singapore institutions for innovative development of new medicines, formulation capabilities and drug delivery mechanisms. Singapore has invested heavily in Asia-prevalent diseases such as cardiovascular disease, diabetes, gastric cancer and dengue (these include 5 translational clinical research flagship programmes of S$25 million each over 5 years). As some of these diseases have a high incidence in Indians, leading Indian pharmaceutical companies have expressed interest to work with Singapore clinical institutions to develop new drugs for these diseases.<br /><br /><strong>Would you then say that pharmaceutical and healthcare is one of the major new sectors attracting investment from India in Singapore?</strong><br />Increasingly, as Indian pharmaceutical and biomedical companies seek to develop innovative or branded medicines, and to penetrate new global markets, Singapore's track record of manufacturing high quality medicines, having a pool of global R&D talent located in world-class research infrastructure, and a strong IP regime to protect key R&D outcomes, gives companies the confidence to internationalise through Singapore. <br /><br />The booming growth of the Asian markets has also encouraged global pharmaceutical and consumer business companies to look towards Singapore as a location to develop and manufacture products for Asian markets. Some global examples include: Amgen's $ 200 million biologics manufacturing plant, pioneering state-of-the-art disposables production technology and its first plant in Asia, Novartis' $ 500 million biologics production site based on cell culture technology and GlaxoSmithKline-A*STAR collaboration on evidence-based formulations -medicines for emerging markets. Bilcare, a Pune-based pharmaceutical packaging company, also conducts R&D for micro- and nano-based smart tags in Singapore.<br /><br /><strong>How successful have Indian companies been in establishing trade links with Asian countries operating from Singapore?</strong><br />The Indian business community here adds to the diverse cosmopolitan business network in Singapore. It facilitates greater investment and trade links between India and Singapore. They are the largest foreign business community in Singapore. Singapore-India total bilateral trade reached S$29.8 billion in 2012. Singapore is the second largest investor in India while India was Singapore's 10th largest trading partner in 2012. Singapore is India's largest trading partner in ASEAN. It accounts for one-third of the total trade between ASEAN and India.<br /><br />Singapore's investments in India are mainly in services, petroleum and natural gas, computer software & hardware and telecoms sectors. Conversely, India's FDI into Singapore reached S$23.8 billion (2011), mainly in financial services, manufacturing and telecoms services. India is one of SG's top 10th largest investors. As at December 2011, there are over 5,000 registered Indian companies in Singapore, spanning diverse clusters from IT services to manufacturing. They form one of the largest foreign corporate contingents in Singapore. <br /><br />The business relationship between India and Singapore took on a new dimension after the signing of India's first ever Comprehensive Economic Cooperation Agreement with Singapore (CECA) in June 2005.<br /><br /><strong>Many Indian companies have grown their business in Singapore through M&A Activity. How successful a strategy has that been in your opinion?</strong><br />Mergers and acquisitions, if well executed, help companies shorten the time required to acquire new markets, assets and / or technology. Some companies such as Tata Steel, Punj Lloyd and Ramky have been able to undertake successful M&As. <br /><br />In light of the M&A trend, not just in Singapore but in the region, EDB offers the Mergers & Acquisitions Scheme, providing an allowance of 5 per cent of the value of acquisition, subject to a maximum of $5 million for each year of assessment. It also provides deductibility of transaction costs and stamp duty relief. EDB's approval is required for the waiver of the condition that the ultimate holding company for the group must be incorporated and tax resident in Singapore. Coupled with the availability of financial assistance and a strong legal infrastructure, Singapore has become a choice location both for orchestrating M&A activities as well as for M&A targets.<br /><br />Through acquisition, Indian companies have tapped on Singapore businesses to access new markets, especially Asia, such as: Marico's acquisition of Singapore-based skin care solutions company Derma-Rx to expand its product portfolio and network and Wipro's acquisition of LD Waxson Group for US$144M to access its skincare and healthcare products in Asia.<br /><br /><strong>How has the presence of Indian companies in Singapore helped in local recruitment and innovation?</strong><br />In Singapore, Companies can recruit a diverse pool of global and Asian talent such as Chinese engineers, Indian infocom professionals and Filipino creative designers and integrate their diverse strengths or deploy out of Singapore. In the last 7-8 years, we have deliberately built up Singapore as a Home for Talent, attracting the leading quality educational institutions such as INSEAD Business School and ESSEC to set up a presence here<br /><br /><strong>Which are some of the major countries (besides India) to have set up operations in Singapore over the last 5 years or so? Are there many countries from Asia doing so as well?</strong><br />Singapore's inbound FDI increased to S$672.0 billion (2011) from S$629.8 billion (2010). In 2011, the US made the record investment of S$77.9 billion this year followed by Netherlands ($66.3 billion), the UK ($55.9 billion) and Japan ($52.5 billion).<br /><br />Investments from Asia Pacific have also gone up in 2011 as companies choose Singapore to be an ideal platform to expand their footprints in the global. Investment from rest of Asia in Singapore has gone up to S$161.9 billion (2011) from S$153.3 billion (2010). After Japan, which invested S$52.5 billion (2011), India was the largest FDI contributor at S$23.8 billion (2011).<br /><br /><strong>In your opinion, which are some of the sectors where Indian companies should think of investing in Singapore in the near future?</strong><br />Singapore is traditionally an IT and telecom hub, where companies value Singapore's talent pool and good infrastructure — such as data centres, data management hubs and high speeds of connectivity around the region — strong competencies in areas such as mobility, enterprise and analytics.<br /><br />In addition, urbanisation and the rise in income of the middle class has boosted the growth of this sector in the region and this is motivating global leaders such as P&G and Unilever to build up their presence in Singapore to access the Asian markets. On top of this, the government is also investing to build pan-Asian consumer insights capabilities to support the creation of new products for these growing markets through detailed analysis of trends and consumption patterns (e.g. through the newly-inaugurated Institute of Asian Consumer Insights). <br /><br />Many Indian companies are venturing overseas to secure upstream resources such as coal mines as well as plantations. Given Singapore's Double Taxation Avoidance Agreements with a number of resource rich countries in Asia, many of use Singapore as a base to invest and manage these upstream resources. These companies are also tapping Singapore's financial infrastructure to facilitate their international trade and project financing requirements.<br /> </div>
