What is CECA?

The Comprehensive Economic Cooperation Agreement (CECA) is a free trade agreement between Singapore and India, aiming to strengthen bilateral ties by eliminating tariff barriers, improving service access, and promoting cooperation in various fields.

CECA: A Window Into The South Asian Country’s Market

The CECA serves as a crucial gateway for Singapore into India’s large consumer market. As a thriving South Asian country with a population of over a billion, India presents vast opportunities for trade and commerce.

Indian markets offer abundant prospects for Singaporean businesses, particularly in sectors like Information Technology, manufacturing, and pharmaceuticals.

The Role Of Indian Professionals And Companies

Under CECA, Indian professionals in 127 specific job categories, including accountancy and engineering, receive a facilitated entry for temporary business visits and work in Singapore.

This provision has enabled many skilled Indian nationals to contribute significantly to Singapore’s economy.

Similarly, CECA provides Indian companies, including Indian banks, more accessible entry into the Singaporean market. It has also facilitated Singapore service providers to access the Indian market more easily.

Clarifying Misconceptions: Indian Nationals’ Unfettered Access?

Despite some misconceptions, CECA does not provide Indian nationals unfettered access to Singapore or its job market.

While CECA facilitates movement, every professional or worker from India still has to meet the work pass criteria set by the Ministry of Manpower in Singapore, much like any foreign professional from a country without such an agreement.

The Benefits for the Indian Government and Singapore

From the perspective of the Indian government, the CECA has allowed Indian businesses to expand their operations in a highly developed and competitive market like Singapore. At the same time, Singapore benefits from tariff concessions, thereby making Singaporean products more affordable and competitive in the Indian market.

Work Pass Permits For Indian Nationals

Under CECA, Indian nationals in certain professions may experience facilitated procedures to acquire work pass permits in Singapore. However, the process is still stringent and requires applicants to meet specific criteria set by Singapore’s Ministry of Manpower (MOM).

There are various types of work passes, and the eligibility requirements for each differ. The two most common work passes are the Employment Pass and the S Pass.

• Employment Pass: This is for foreign professionals who have a job offer in Singapore. Candidates must earn at least SGD 5,000 a month (for non-financial services sector) and SGD5,500 a month (for financial services sector), and have acceptable qualifications, usually a good university degree, professional qualifications, or specialised skills.Furthermore, from 1 September 2023, new Employment Pass (EP) candidates need to pass the points-based COMPASS in addition to meeting the abovementioned EP qualifying salary. You may read up more about the COMPASS 2-stage eligibility framework on MOM’s website here: https://www.mom.gov.sg/passes-and-permits/employment-pass/eligibility
• S Pass: This is for mid-skilled foreign employees (technicians) who have a job offer in Singapore. Candidates must earn at least SGD 3,150 a month (for non-financial services sector) and SGD 3,650 (for financial services sector), have relevant work experience, and possess a degree or diploma. Some technical certificates can also qualify, but these must include at least one year of full-time study.

For both these work passes, the employer in Singapore must apply on behalf of the candidate. Furthermore, the Ministry of Manpower assesses each application on its own merits, based on the applicant’s qualifications, salary, skills, job type, and the employer’s quota for hiring foreign employees.

In conclusion, while CECA simplifies procedures for specific Indian professionals, acquiring a work pass permit in Singapore remains a selective process that ensures quality foreign workforce participation in Singapore’s economic development.

Facilitating Business For Indian Companies

CECA significantly eases the process for Indian companies to establish their businesses and expand operations in Singapore, which has consistently been ranked among the world’s top locations for ease of doing business. Here’s how:

• Easier Market Access: CECA provides Indian companies with better access to the Singapore market by reducing or eliminating tariffs, thus making Indian products and services more competitive in Singapore.
• Facilitation of Investments: The agreement encourages and protects investments made by Indian companies in Singapore, providing them with a more secure and predictable operating environment.
• Streamlined Regulations: CECA ensures the reduction of regulatory barriers to trade and investment, making it more straightforward for Indian businesses to operate in Singapore.
• Recognition of Standards: The agreement facilitates the mutual recognition of standards and qualifications in professional services such as accountancy and architecture. This recognition reduces the procedural hindrances Indian service providers may face.
• Dispute Resolution: CECA provides mechanisms to resolve any disputes arising out of business operations, thus ensuring a fair and efficient business environment.
• Double Tax Avoidance: Both countries have a Double Taxation Avoidance Agreement (DTAA) in place, which means Indian businesses operating in Singapore can avoid being taxed in both countries.

Moreover, Singapore’s robust infrastructure, strategic geographic location, and status as a financial hub provide Indian companies with a gateway to the wider Southeast Asian market. Consequently, Indian businesses can use Singapore as a launching pad to expand not only in the city-state but also in the broader ASEAN region. The streamlined process, protection of investment, and favourable business conditions brought forth by CECA truly support Indian companies’ growth and success in Singapore.

Conclusion

In conclusion, the Comprehensive Economic Cooperation Agreement (CECA) between Singapore and India is a strategic agreement that has boosted bilateral trade and strengthened relations.

It’s important to note that while CECA eases the immigration process for certain Indian professionals, it does not provide unrestricted access to Singapore’s job market for Indian nationals. The agreement is, in essence, a cooperative effort to stimulate economic growth and progress in both countries.