In an abrupt turn of direction, the Singapore Government suddenly blocks visas for Indian IT professionals.
A report by the Times of India (TOI) on 3 April said that Singapore has violated the FTA-CECA agreement by restricting the free flow of Indian IT professionals into Singapore.
The CECA is the Comprehensive Economic Cooperation Agreement (CECA), a trade pact which the two countries signed in 2005.
India’s services trade is highest with Singapore, amongst all Asian nations.
In the latest controversy over the trade agreement, sources say that Singapore authorities are now insisting on an “economic needs test” (ENT) from companies to justify their need for further access to Indian IT professionals.
“They (Singapore) are doing it despite the CECA clearly stating that there will be no ENT or quotas on agreed services. This is a violation of the agreement,” said an Indian government official, according to TOI.
Chapter 9 of the CECA mandates the recognition of up to 127 professional jobs here for Indian professionals. Currently there are about 200,000 of them working in Singapore, with an estimated 7,000 to 10,000 in the IT industry.
The TOI report said that Indian IT companies are now “looking at relocating some of their operations to other countries in the region”.
The report said companies which are looking to do so include HCL and TCS, which were the early movers to Singapore in 1980s, Infosys, Wipro, Cognizant and L&T Infotech.
Apparently, these IT companies, a number which are based in Changi Business Park, have received communication with regard to the Fair Consideration Framework (FCF), which requires them to give priority to Singaporeans when hiring or recruiting workers.
The FCF, which was introduced in 2014, “sets out clear expectations for companies to consider Singaporeans fairly for job opportunities.”
“For all practical purposes, visas have stopped for our people,” said an Indian industry executive.
According to the Economic Times on 4 April, at the heart of the latest controversy are three issues:
- The increase in minimum salary eligibility criteria for those applying for jobs in Singapore
- The FCF requirements
- The withholding or delay of approving work permit & visa applications since February 2016
“This is hurting our companies badly,” said Gagan Sabharwal, director of Global Trade Development with Nasscom.
“Cancelling visa requests would also constitute a violation and hence Singapore has been sitting on visa applications from Indian IT firms,” the Economic Times said. It also reported that “nearly 200 applications have been put on a ‘watch list’ since last year, with the Singapore government taking no action on the visa status.”
“Many companies have been waiting endlessly for many months,” the Economic Times said. “Singapore is considered as the easiest place for doing business in the world but for us it has become one of the most difficult places to do business because of the current policy of not allowing intra-company transferees visa,” Mr Sabharwal said.
The Indian government has now decided against expanding the scope of goods where import duties would be cut unless their concerns are addressed, the TOI report said.
This is not the first time that such dispute with India has emerged.
Back in 2013, against the backdrop of the 6.9 million Population White Paper, the Singapore Government took measures to curtail the influx of Indian FTs by introducing the FCF. The Indian Government threatened to take Singapore to the World Trade Organisation Tribunal to settle the dispute. (See here: “Govt decries CECA violation by Singapore“.)
Singapore then had announced that it planned to bring down the percentage of its foreign workforce to about one-third of the total.
It has also been reported that the Indian government “is currently reviewing Free Trade Agreements that India has signed with trading partners after the industry voiced concerns about benefits of these pacts for domestic players.”
“These agreements have been signed with several countries, including Asean bloc of nations, Japan and Korea,” said the Business Standard website. “It is also negotiating similar pacts with several regions, including the European Union, Australia, New Zealand and Canada.”