The city state is India’s strategic partner in Southeast Asia and the financial hub for the Indo-Pacific region. It has a free trade agreement (FTA) with Eurasian Economic Union (EAEU) and is exploring the establishment of a trade and transit corridor with Kazakhstan, in which the Chabahar port would be a key link between SE Asia and Central Asia, according to people in the know.
The president of Kazakhstan recently visited Singapore and the issue of trade and transit corridor figured prominently in his dialogue with his host.
In May last year, when the then Singapore President visited Kazakhstan, the two sides had decided to put in place a trade and transit corridor that would connect Eurasia with the SE Asian market. Singapore had signed an FTA with EAEU in 2019.
An important result of the 2023 presidential visit was the signing of an agreement between the EAEU and Singapore on trade in services and investments within the framework of the FTA. The document is intended to create more favourable conditions for doing business by simplifying regulatory processes and reducing barriers.
Vietnam, another emerging economy and India’s close strategic partner, has also entered into an FTA with the EAEU.On May 13, India and Iran signed a historic deal that gives India 10-year rights for managing the Chabahar Port. In December of 2018, India Ports Global Ltd (IPGL), through its wholly owned subsidiary India Ports Global Chabahar Free Zone (IPGCFZ), took over the operations of the Chabahar Port. Since then, it has handled more than 90,000 TEUs of container traffic and more than 8.4 MMT of bulk and general cargo.IPGL will invest about $120 million in equipping the port. India has also offered an INR credit window equivalent to $250 million for mutually identified projects aimed at improving Chabahar-related infrastructure, according to officials.
The port is India’s key connectivity link to Afghanistan, Central Asia and the larger Eurasian region. There are plans to link Chabahar Port with the International North South Transport Corridor (INSTC), which connects India with Russia via Iran. Kazakhstan and Uzbekistan have been very keen to utilise the port to access the Indian Ocean Region and the Indian market.
Kazakhstan is developing a Trans-Caspian international transport route that will connect the vast markets of Asia and the European Union (EU). Kazakhstan’s cooperation with Singapore, a major international transport and logistics centre, can help both countries improve the efficiency of transport links in Asia, according to people with knowledge of the dynamics of transport corridors.
In a world with a new geopolitical alignment, security and consistency of supply chains have become more important than ever. In this regard, Kazakhstan has enormous potential for the supply of rare earth metals and India is eyeing this.
Singapore’s experience in introducing innovations in areas such as finance and technology can complement the advantages of natural resources, geographical location and the developing infrastructure of Kazakhstan and other Central Asian states. More than 140 Singaporean companies and joint ventures are currently operating in Kazakhstan, with Singaporean investments in the Kazakh economy surpassing $1.7 billion.
Content Source: economictimes.indiatimes.com