Lee Hsien Loong, the Singapore PM finds Indian Business environment complicated
Singapore PM Lee Hsien Loong on his visit to India asserted that Business environment in India is complicated. From the term “Complicated” he was referring to red-tapism. Although he didn’t point to the proposed GAAR or retrospective Income Tax Act amendments, he held that companies investing in India look for predictability of rules.
- After Mauritius, Singapore is the second country to send a high-level delegation to India after the the issuance of draft guidelines on the General Anti-Avoidance Rules (GAAR)
India, however, has assured Singapore to remain an investment- friendly country
India and Singapore are reviewing the Double Taxation Avoidance Agreement (DTAA) between the two countries. A ‘limitation of benefit’ clause has already been added to the DTAA to avoid its misuse by companies not genuinely based in Singapore.
The Importance of Singapore to India:
· Among the group of ASEAN, Singapore is India’s largest trading partner
· After India signed Comprehensive Economic Cooperation Agreement (CECA) in 2005, the bilateral trade is reported to have been expanding at 20% per annum
· B/w 2006-07 and 2010-11, trade has increased by 51%, and it is projected to touch $32 billion by 2015
· Singapore has a share of 10% of India’s total incoming FDI, which makes it 2nd largest investor in Indian economy.
· Singapore is India’s doorway to ASEAN, China and APEC. Many Indian companies using Singapore as a platform for functions in South East Asia