On 29 June 2005, India and Singapore signed the India-Singapore Comprehensive Economic Cooperation Agreement (CECA). This free trade agreement not only enables Singapore and India to trade goods freely, it also allows professionals to work in each other country more easily.
The CECA was concluded after 13 rounds of negotiation and the Singapore’s side was led by none other than Heng Swee Keat, the current PM-in-waiting, who was then Permanent Secretary for Trade and Industry. Heng and his team essentially did the ground work together with their Indian counterparts. They then presented their proposals to the politicians for approval.
Some of the areas covered by CECA include: Improved Avoidance of Double Taxation Agreement, Trade in Goods, Customs, Investment, Trade in Services, Intellectual Property, etc.
However, controversial ones include concluding further Mutual Recognition Agreements (MRAs) so as to facilitate the freer movement of professionals between Singapore and India. It helps to recognise each other’s education and professional qualifications so that Indian and Singaporean professionals from the following five professions could be able to practise in each other country:
- Accounting and auditing
- Medical (doctors)
Already, Singapore now recognises degrees of Indian doctors and nurses from certain Indian universities.
Movement of Natural Persons
Then, CECA also enables movement of persons between both countries. In particular, professionals employed in 127 specific occupations will be allowed entry and stay for up to 1 year or the duration of contract, whichever is less.
Also, intra-corporate transferees (i.e. managers, executives and specialists within organisations) will be permitted to stay and work in India and Singapore for an initial period of up to 2 years or the period of the contract, whichever is less.
The period of stay may be extended for period of up to 3 years at a time for a total term not exceeding 8 years.
In theory, of course, CECA could also benefit Singaporean professionals wanting to work in India but how many Singaporeans really want to work there to earn in rupees?
Indian companies try to exploit CECA loophole
After CECA was signed, some of the Indian IT companies set-up in Singapore tried to exploit the “intra-corporate transferee” loophole so as to get more Indian IT workers to work here. They would hire them in India and then “transfer” them to their Singapore subsidiaries to work, without the need to hire any Singaporeans.
This is because in Article 9.3, it said:
“Neither Party shall require labour market testing, economic needs testing or other procedures of similar effects as a condition for temporary entry in respect of natural persons upon whom the benefits of this Chapter are conferred.”
That is to say, economic needs testing like Singapore’s fair consideration framework which ensures fair hiring of Singaporeans cannot be applied to “intra-corporate transferees”. To top it all, Article 9.6 even allows the “intra-corporate transferees” to bring their spouses or dependents into Singapore to work.
India unhappy with Singapore
By 2017, thanks to CECA, large number of Indian professionals especially those in IT sector were moved into Singapore as “intra-corporate transferees”, since CECA did not set any quotas. Few Singaporeans, if any, were hired.
Many Singaporean PMETs started filing complaints of discrimination to the Manpower Ministry through the Fair Consideration Framework. The Singapore government was forced to slow down the approvals of Indian professionals to work here.
“This (visa problem) has been lingering for a while but since early-2016, visas are down to a trickle. All Indian companies have received communication on fair consideration, which basically means hiring local people,” the president of Nasscom, the IT association of India, complained.
In retaliation, the Indian government decided against expanding the scope of goods where import duties for Singapore goods would be cut unless the concerns of Indian industry are addressed, the Times of India reported.
In particular, the Indian government is against Singapore using the “fair consideration framework” to regulate the employment of Indian professionals in Singapore. “They (Singapore) are doing it despite the CECA clearly stating that there will be no ENT (economic needs test) or quotas on agreed services. This is a violation of the agreement,” warned an Indian official.
Obviously, when Heng negotiated CECA with India prior to 2005, he had not foreseen all these issues facing Singaporean PMETs. Perhaps he cared more if GIC and Temasek could invest freely in India or if DBS could open more branches there?
Nevertheless, Heng was confirmed to be appointed DPM of Singapore on May Day. Opposition member Lim Tean has this to say to Heng, the current PM-in-waiting, “Heng Swee Keat should explain his role in CECA, which cost Singaporeans jobs! What is the benefit to Singapore of CECA?”