Singapore eyes India to up investment, expand business: IE Director
By Gurdip Singh
India’s Open Door Economic Policy has evoked a tremendous response from Singaporean companies, some of which are venturing as wholly-owned subsidiaries and others through branch offices, marketing or liaising arms into the country, according to Benjamin Yap, Group Director for South Asia Group at International Enterprise Singapore, or IE Singapore.
Yap spearheads IE Singapore’s activities in India through an office each in New Delhi, Mumbai and Chennai, as part of a massive effort to internationalize Singapore businesses.
There is place for businesses of all sizes in the Great India Consumer Bazaar, ranging from multi-national conglomerates to small and medium enterprises, and particularly for those who are specializing in niche activities.
An estimated 200 Singaporean companies are operating in India on various projects and businesses. These include Hyflux Group, Meinhardt and Keppel Corp.
Singapore is developing a master plan for the new capital city in the southern Indian state of Andhra Pradesh. The new city will come up in the Guntur-Vijayawada region and will entail investments of more than S$20 billion. Representatives of the Centre for Liveable Cities and Singapore IE were recently in India to work on the project.
Even sky is not the limit, says Yap of the potential of Indian markets but he is quick to add that most of the opportunities have not been well presented to global investors.
As prospects of doing business in India turn even brighter, many of the Singaporean companies are eyeing the Asian giant’s food and furniture industries. There are big opportunities in food manufacturing and exports as well as packaging among others.
There is an aspirational middle class in India looking for a variety of choice in terms of furnishing options and accessories. “We have some capabilities in this sector,” he added.
Building and enhancement of skills is another area, where Singapore can partner with India. There is no need for technology transfer from Singapore as India already has an expertise in engineering. The Information Age has enabled access to all technological knowledge while there can be transfer and exchange of skills, said Yap.
According to experts, Indians have taken up school education in a big way but in majority of the cases this has not led to imparting of job oriented skills to them. India now has a large population of graduates, which don’t have sufficient skills that can land them a job. Graduates account for almost 20% of India’s unskilled labor population, estimates show. Only 2% of Indian workers are professionally trained. For large projects to succeed in India, the country needs requisite skills, structured project management and techniques, which Singapore can provide.
Singapore’s structured way of doing project management can be adopted in Indian projects as well that can ensure their timely implementation. Knowledge transfer will be a two-way street between Singapore and India, he said.
India has tremendous expertise, especially in the field of applied sciences and engineering. Yap applauds the success of India’s Mars Mission, an indigenous feat in space science achieved in double quick time at a fraction of the cost of similar efforts made elsewhere in the world.
The Mars Orbiter Mission, Mangalyaan or Mars-craft, successfully entered Mars’ orbit on September 24, 2014, in its first attempt.
India is moving ahead at a frantic pace in other sectors as well.
Mr Yap outlined IE Singapore’s market plans for India in the coming year and the years ahead, saying “we would like to compliment the central government’s initiatives.
The initiatives taken by the new Indian government led by Prime Minister Narendra Modi have increased the entrepreneurs’ interest in India.
These initiatives include the Clean India Program, setting up of 100 Smart Cities, the Digital India project and equally important the Make in India plan under which investors from all over the globe are being invited to set up their manufacturing units in India, says Mr Yap who leads IE Singapore’s missions in India scouting businesses for Singapore-based companies.
“Sell your products anywhere in the world, but make them in India,” Mr Modi roared during in his first Independence Day address from the ramparts of the Red Fort on August 15.
Investors are now relooking at their proposals and projects for developing businesses with India in a constructive and positive manner, Mr Yap said.
Mr Yap believes Singapore’s investment in Indian engineering services would be most lucrative, given its large pool of engineers with capacity to handle both domestic and global projects.
Experts have time and again pointed out at the shortfall of engineers and skilled workers in India but Mr Yap remains optimistic.
India is also a well-established exporter of services including cutting-edge software, intellectual property and engineering techniques, he said.
OPTIMISM WITH CAUTION
“Analyzing international business community response to India’s initiatives, especially in the last year alone, we see an increasing level of interest and seriousness now.”
IE Singapore is looking at three specific sectors to boost investment in India. Tapping consumerism linked to aspirational needs and goals of both rural and urban India is one of them.
Another is the focus on technology via the Digital India initiative, particularly expansion of e-governance and capacity building. To facilitate e-governance, India has launched a project to provide a unique identity number to each citizen of the country, under the Aadhaar Card Project. In Singapore, both citizens and foreigners already have a unique identity card and its expertize will come in useful if inputs are taken for the Aadhaar Card Project.
Finally there is the vital area of developing infrastructure to address the need for urban growth and management – water, energy, waste and integration of governance policy and planning for the development of 100 smart cities.
The smart cities project has brought into sharp focus India’s ongoing phenomenal pace of urbanization. At the time of Independence, more than half of the country’s GDP comprised of agriculture, now it is less than 15%. Close two 2,800 new towns have been carved out of villages in the previous decade alone. Rural land is increasingly being brought under the nearest municipality and thus given urban status. As existing towns and cities expand and new ones come up, real estate projects are expanding in a big way across the length and breadth of India. These projects have to be developed ‘smartly’ to avoid any haphazard development.
“We can offer assistance and partnership in sharing our best practices across these areas.”
He noted that the efficiency related challenges in some of the sectors and suggested that Indian way of frugal innovating or “juggaad”, the local term for trying to adapt to the market environment, is a favorable feature.
Yap also observed that Singapore companies are cautious when venturing into India, due to the different ways of operating businesses there.
“These companies are also selective in forming partnerships. Most of the Singaporean companies are still in their infancy or nascent stage of establishing business in India.”
The trend is starting to somewhat change now and Singapore-based companies would have to soon develop a base load in India, he points out. Yap wants them to re-think about the Indian market, pointing out that Indian economy is not about multi-national corporations alone but also for SMEs and those with niche products.
“Executives of some of these companies have evinced interest to visit India and have started looking at opportunities, which is indicative of the changing sentiment.”
Singapore’s Landmark Projects in India
Singapore’s Changi Airport International, or CAI has increased its stake in Bengal Aerotropolis Projects Ltd, or BAPL to 32.2% in August 2014 from 26% held since 2009 when the project began. The Durgapur project is one of the major investments by a Singapore government-linked business group in India.
BAPL and CAI have also signed a Memorandum of Understanding in August 2014 to explore the setting up of an aviation training academy in West Bengal. Singapore’s ITE Education Services, a subsidiary of Institute of Technical Education, will be a key training partner of CAI.
PSA International has signed a 30-year concession deal to develop and operate a container port near Mumbai on the India’s west coast.
Bharat Mumbai Container Terminals Private Limited or BMCT, a wholly-owned subsidiary of PSA Bharat Investments Pte Ltd and a subsidiary of PSA International, signed a concession deal with Jawaharlal Nehru Port Trust, or JNPT on May 6, 2014. It would develop the JNPT’s fourth container terminal on a design, build, operate, finance and transfer basis in Mumbai over a period of 30 years.
Located at India’s largest and premier container gateway port, BMCT will have berths with a depth of 16.5 metres, the deepest in JN Port. BMCT will be equipped with the latest technology and equipment to serve important industrial and manufacturing centres and cities in India’s largest hinterland. BMCT is well-connected by major highways and rail networks to key markets in India’s fast-growing economy.
When BMCT is fully completed, it will have a quay length of 2,000 metres with a design capacity of 4.8 million TEUs per annum.
PSA will work along with JNPT to develop this very important terminal for catering to the increasing demand for container handling capacity, and facilitate maritime trade in India, said Tan Chong Meng, Group CEO, PSA International.