Major Takeaway: Semiconductor Push Main Driver To PM Modi’s Singapore Visit – Analysis
Prime Minister Narendra Modi’s multi-nation tour in the past weeks was a demonstration of India’s newfound influence around the world. Coinciding with China’s intractable economic slowdown, Modi’s visits grabbed world’s attention as India was seen as the leader of the Global South and his charm offensive received considerable appreciation. Modi’s visits to both Kyiv and Moscow were followed by his visits to Brunei and Singapore in Southeast Asia, a region that China considers its backyard. What the world could not miss out that as the world’s fastest growing major economy, India is soon emerging as a worthy alternative to China, its rival in the Global South.
It did not matter that Modi’s ruling Bharatiya Janata Party could not get a parliamentary majority in the recently held elections to the Lok Sabha. But it did emerge as the single largest party and succeeded in roping in some alliance partners to form his third term government. What the world saw was political stability and continuation of the policies adopted in the previous two terms. This helped India earn the confidence of the partner countries to do business with India.
In the first leg, PM Modi travelled to Brunei Darussalam and then travelled to Singapore in his second leg. It was the first visit by an Indian Prime Minister to Brunei, while it was Modi’s fifth trip to Singapore. Brunei is an important partner in India’s Act East Policy and Indo-Pacific vision, and the talks with Sultan Haji Hassanal Bolkiah, the world’s longest reigning monarch, were focused on trade, defence, space and cultural ties. Talks with Singapore leadership focussed more on economic and strategic matters.
Indeed, India’s civilization links with many Southeast Asian countries and the cultural connect have helped Prime Minister Modi to pursue his Act East Policy. The influence of Buddhism and the ancient trading relations have also been favourable factors for India to push its Act East Policy. The presence of a sizable Indian diaspora in many Southeast Asian countries such as Laos, Vietnam, Thailand, Singapore, Indonesia, the Philippines and even Brunei has provided the bridge for India with the countries of their adoption to contribute to the goodwill. Such traits are vital for doing business and also help maintain congenial political relations. India scores over its trading rival China in many parameters such as its democracy, rule of law, an independent judiciary, a strong civil service and all of these honed by the English language. In contrast, Southeast nations see China as authoritarian, a system that is opaque and unstable, and therefore not ideal to do business.
This being said, there are issues where India is found wanting. As the largest country in South Asia in terms of size, population, resource endowment, and robust economy, it has not been able to earn the confidence of most of its neighbours. Its ties with Pakistan are mired by terrorist activities for decades and solution remains eluded. Its relations with Maldives, Bhutan, Nepal, Sri Lanka and Bangladesh have a Chinese angle and that is a worry. The latest developments in Bangladesh have posed new challenge for India to navigate its foreign policy in South Asia.
In order to correct this, India needs to adopt some measures for course correction. As a first, the notion of India being perceived as a Big Brother must give way to be seen as an Elder Brother. Rigidity on all issues must have room for compromises, sacrifices, concessions even if those steps do affect India marginally and negatively. India also ought to take some special measures and come out with structured plan to contribute to the economic development of its neighbouring countries. India also needs to respond positively to the call by the interim government head in Bangladesh Mohammad Yunus to resurrect the SAARC. India should take the lead on this. By allowing Bangladesh’s ousted leader Sheikh Hasina to stay in India after she fled from her country following violent protest against her policies and not sending her back to her home country despite the existence of an extradition treaty between the two countries, India is only being perceived to be seen as a bully and Big Brother. That tag must go.
So, what did Modi gain for India from his visits to Brunei and Singapore? Though India under Modi was projected to be seen as the leader of the Global South, did he achieve much on this? That is subject to critical scrutiny. One thing that transpired however was by discussing the semiconductor issue with Singapore, India is keen to seize the opportunity from China’s economic pain.
While in Singapore, Prime Minister Modi and Singapore’s President Tharman Shanmugaratnam agreed to upgrade the India-Singapore bilateral ties from Strategic Partnership to “Comprehensive Strategic Partnership” to deepen and broaden cooperation between the two countries. This was a timely move as both agreed to expand their partnership in new and mutually beneficial areas, and celebrate 60th years of diplomatic relations and 10th anniversary of their Strategic Partnership in 2025. After Modi’s meeting with Singapore Prime Minister Lawrence Wong, the latter was candid in saying that the “productive meeting’ between the two prime ministers set out a “forward-looking agenda” for the next stage of bilateral relations.
It was heartening to note that Tharman saw India as a “leading centre of growth over the next decade, driven by social and digital investments across the wide span of its population, as well as its new economic linkages”. Indeed there are huge potentials for India and ASEAN to complement each other’s growth and build stronger supply chain linkages. Modi and Wong exchanged views on bilateral as well as in regional developments. Both discussed cooperation in areas such as sustainability, digital technologies, advanced manufacturing, and connectivity. Potential areas for collaborations such as cross-border electricity trade and green ammonia supply chains, a joint flagship programme for skills training, enhancing cross-border data flows via the Gujarat International Finance and Tec-City (GIFT City), and cooperation in developing industrial parks in India figured in the discussion.
Four exchanges of government-to-government Memorandums of Understanding (MOUs), including areas such as digital cooperation, education and skills development, health and medicine, and semiconductor ecosystem cooperation were signed. The joint statement recognised that bilateral business and commercial linkages constitute key drivers of the wide-ranging India-Singapore partnership. Reaffirming the significance of the Comprehensive Economic Cooperation Agreement (CECA) signed in 2005, and reviewed in 2007 and 2018, for the economic partnership between the two countries, Modi and Wong resolved to take bilateral ties to the next level. Both also agreed for an early conclusion of the third review of CECA.
Besides the economic issues, both prime ministers in the joint statement expressed their convergence of views on regional and international issues. They reaffirmed the importance of “maintaining and promoting peace, security, stability, safety and freedom of navigation in and over-flight above the South China Sea, while pursuing the peaceful resolution of disputes in accordance with international law, particularly the 1982 United Nations Convention on the Law of the Sea (UNCLOS), without resorting to the threat or use of force”.
The major takeaway of Modi’s visit to Singapore was however on the focus on chip manufacturing. Given the critical importance of semiconductor chips in virtually everything from missiles to mobile phones and from cars to computers, all of which have great geostrategic and geo-economic importance, the signing of a pact for collaboration with Singapore, an early mover in the industry, carries much promise. India seized an opportunity by its forward-looking approach as it realised supply disruptions during the Covid-19 pandemic and the geopolitical tensions arising out of China’s aggressive moves in the Taiwan Strait and the South China Sea that propelled India to make vigorous efforts to develop its own semiconductor ecosystem. The global chip industry is dominated by companies from a very small number of countries, and India is a late entrant into this high-tech and expensive race. Such forward-looking policies can help realise PM Modi’s vision of realising a Vikshit Bharat by 2047 and a five trillion dollar economy.
