A Pact Between India and Singapore
Already, India has a free trade pact with Thailand. There is further scope for economic diplomacy for India in this region which can result in a larger share of the growing service pie. Viewed in this perspective the Singapore agreement is just a beginning, though a significant one in the right direction.
Such bilateral pacts have assumed greater importance precisely because the WTO has not been able to make any breakthrough in movement of labour. The rich nations are opposed to GATS (General Agreement on Trade in Services) in respect of allowing freer immigration of workers from third world countries. There is some opposition to GATS in India as well on the ground that it may lead to increase in the level of wages. The next Ministerial level conference of the WTO is scheduled to take place in Hong Kong where such agreements are bound to put pressure to ease immigration norms of developed nations.
In the mean while Singapore has the potential to become the second ‘Gulf’ for thousands of Indians who excel as professionals and service providers. The Indian industry on it’s part must prepare to fact further shortages of skilled manpower at least in certain fields. As a result, the wage bill of the India Inc. may see a rise. To stay competitive, Indian firms will have to innovate, reduce other costs and learn better management skills.