Deepening ties between India and Singapore offer a glimpse into the future of ASEAN resilience

After India was hit with a 50% trade tariff by the Trump Administration — among the highest globally — the government accelerated efforts to diversify trade relationships and overhaul its import-export strategy.

Singapore emerged as a frontrunner. In 2024-25, it became India’s largest trade and investment partner in ASEAN, accounting for 27.83% of overall trade in the bloc. It also stands as the top source of Foreign Direct Investment into India.

This deepening of ties is decades in the making. In 2025, India and Singapore mark 60 years of diplomatic relations — six decades of expanding collaboration across sectors.

Over the last 25 years alone, Singapore has invested $175 billion in India, now accounting for 24% of all FDI inflows. Key agreements such as the Comprehensive Economic Cooperation Agreement (CECA) and the ASEAN-India Free Trade Agreement (AIFTA) in Trade in Goods (TIG) have played pivotal roles in cementing this bond.

And the future looks even more promising.

Indian High Commissioner to Singapore, P Kumaran, recently noted that both nations are identifying new growth drivers for the coming decade, with an “active calendar” of over 20 bilateral mechanisms, dialogues, and exercises underway.

India and Singapore double down on tech partnerships

India’s ambitions to become a tech superpower are gaining traction. Ranked 10th globally in AI in 2025, India is poised to rise, driven by a robust pool of engineering talent and software prowess.

The AI market is projected to hit $20-22 billion by 2027. However, despite generating nearly 20% of global data, India holds only 3% of the world’s data center capacity, pointing to urgent infrastructure needs.

Google’s October 2025 announcement of a $15 billion AI hub in Andhra Pradesh is one step — but diversification is essential. With Trump-era tariffs still influencing policy, India can’t afford to rely solely on US tech partnerships.

In September 2025, India and Singapore announced deeper cooperation in AI and semiconductors through new industry agreements. Given that Singapore contributes 10% of global chip output and 20% of semiconductor equipment, it is a natural partner as India prepares to launch its own chips by year-end.

Both countries are also investing in sovereign AI models to reduce dependency on US or Chinese technologies. Singapore’s multilingual model spans 11 regional languages; India’s BharatGen understands over 22.

Their tech collaboration also extends to digital payments. In a joint virtual launch, PM Narendra Modi and Singapore’s PM Lee Hsien Loong unveiled real-time UPI-PayNow payment linkage — offering fast, low-cost cross-border transactions and benefiting millions in the Indian diaspora.

Singapore-India defense strategy 

Defense cooperation has become another key pillar. India and Singapore’s strategic alignment enhances regional stability and supports shared national interests.

Since the 2000s, defense ties have strengthened. India granted Singapore rare access to military facilities like the Kalaikunda Air Force Base for air combat training. The 2003 Defense Cooperation Agreement (DCA) institutionalised this relationship through regular dialogues, intelligence-sharing, and joint tech development.

The Indian Navy hosted the 29th Singapore-India Maritime Bilateral Exercise (SIMBEX) in October 2022, conducted in Visakhapatnam and the Bay of Bengal. These exercises reflect the maturity of maritime cooperation and shared commitment to Indian Ocean security.

During PM Modi’s fifth visit to Singapore in September 2024, both governments reaffirmed their defense partnership and acknowledged high-level joint military exercises like Agni Warrior, SIMBEX, SITMEX, and JMT.

This defense synergy also supports broader initiatives like the India-Singapore Green and Digital Shipping Corridor (GDSC), designed to improve port connectivity and establish a green maritime fuel corridor.

The two nations have now pledged to boost defense tech cooperation, particularly in AI and quantum computing. Singapore has also acknowledged India’s interest in joint Malacca Straits patrols. Additional agreements in shipping, civil aviation, and digital assets are expected to further mitigate the effects of US trade barriers.

Laying the foundations for greater trade integration

At the 60th anniversary event, India and Singapore celebrated their robust and expanding trade ties.

The India-Singapore CECA includes: a free trade pact in goods; enhanced trade in services including finance; increased investment flow with protection mechanisms; and avoidance of double taxation.

Singapore remains a hub for pre-market IPO/FPO discussions and roadshows. Ten Indian banks operate there, with SBI and ICICI granted Qualifying Full Bank (QFB) status.

Key Indian exports to Singapore in FY25 include petroleum ($4.97 billion), engineering goods ($4.47 billion), chemicals ($1.21 billion), gems/jewelry ($554 million), and electronics ($565 million).

The pact also covers mutual recognition of quality certifications, relaxed visa norms for professionals, and collaboration on customs, IPR, education, e-commerce, and dispute resolution.

What began as a trade-driven relationship has evolved into a multifaceted alliance spanning politics, technology, defense, and culture. At its heart, this is a relationship built on mutual respect and shared values.

(Frank Jurgen is Chairman of Horasis, an independent, international think tank headquartered in Zurich, Switzerland)