The India-Singapore Comprehensive Economic Cooperation Agreement (CECA) entered into Phase-2 on 20 December 2007 when both sides agreed to further revise the tariff rates as agreed under the CECA signed in June 2005. According to the provisions of the revised CECA, India will further reduce tariffs on 539 items under the existing agreement. Out of this, tariff reduction for 307 items would be completed in five steps between January 2008 and December 2011. Tariff reduction for another 97 products would be completed in nine steps between January 2008 and December 2015. For the remaining 135 items, tariff reduction of only 5% would be completed between January 2008 and December 2015. In this manner, after the implementation of the proposed tariff liberalization program, 93% value of India's total imports from Singapore would be the subject of tariff reduction process.

While the bilateral trade, investment and business linkages have gone up after the signing of the CECA, the existing potential of economic cooperation has remained hugely underutilized. Going beyond the expectation of touching US$10 billion in two-three years, the bilateral trade crossed US$19 billion by the end of one year itself in 2006. During the year of 2006-07, Singapore had 4% share in India's total trade which was 3.5% in 2005-06.

In addition to the increase in the bilateral trade, the CECA has also offered opportunities to the Indian companies for their market expansion in Southeast Asia. Being a regional economic hub, many Indian companies have extended their market operations to Singapore. Now almost 2800 Indian companies such as TATA, Mahindra, Godrej, Satyam Computers, NIIT etc are functioning in Singapore and the presence of Indian companies in Singapore has been growing at the rate of 10% per year.

The total FDI from Singapore to India also increased after the signing of the CECA from US$893 million in September 2005 to US$2.127 billion in June 2007. Singapore is the sixth largest investor in India. However, Singapore's investment in India has remained much below the existing potential since many sectors for investment such as ports, urban infrastructure, biotechnology, food processing, animation, entertainment and tourism have not been explored fully. Given the expertise of Singapore in developing Special Economic Zones (SEZ) in China and Vietnam, the former could also be considered as a source of investment for establishing SEZ in India. The Singapore Business Federation (SBF), the apex business chamber, has also recommended huge possibilities of investment in the development of SEZ in India especially in West Bengal. However, the lack of consensus among Indian political parties and continued protests over the setting up of SEZ have desisted Singaporean investors from investing in SEZ.

However, there are some other issues in the CECA, which require immediate attention from both sides, such as the issue of movement of Indian professionals to Singapore. As a part of the CECA 2005, both governments had signed Mutual Recognition Agreements (MRA) in goods and services along with the mutual recognition to the degrees and technical qualifications of each other's institutions. Both sides agreed to liberalize the visa regime on 127 categories of professionals. However, after two years of the signing of CECA the movement of Indian professionals to Singapore has not gained momentum yet and Singapore has not shown enough willingness to recognize the technical and professional degrees of second grade Indian institutes. India also has not taken required initiative in this regard. In order to reap the benefits from the MRAs, both sides have to consider this issue seriously. Apart from governmental level dialogue, the beginning of discussions between Indian professional bodies such as the Institute of Charted Accountants of India, the Medical Council of India etc and their respective counterparts in Singapore could also play an active role to sort out this issue early.

Moreover, a lot of effort is needed in the case of mutual recognition to the service sectors in each other's country, particularly the recognition of banking services. Since Indian Banks such as the SBI and ICICI have not yet received the Qualified Full Banking (QFB) license in Singapore, the Singapore Banks have also not been extended the QFB license in India.

An assessment of CECA after two and a half years underscores the point that though bilateral trade has definitely gone up considerably after the signing of CECA, the credit for the increase can not be attributed to the CECA only since the tariffs were much lower in Singapore before the signing of the CECA. As Singapore was already an open economy the liberalization program in goods under the CECA was not the main area of India's interest. India's focus was, rather, on the tariff liberalization in services. However, due to the lack of required initiatives at the implementation level the existing complementarities in the services sector could not be tapped fully. Therefore, now when India-Singapore CECA has entered into phase-2 and talks to establish CECA with EU, Malaysia, and Japan are in the pipeline then the appraisal of India-Singapore CECA conveys a message that only signing of an agreement is not enough. To extract all possible advantages from such agreements close monitoring at the implementation level is needed.