With its startup ecosystem stabilising over the span of the last year, India is quickly emerging as a dark horse that the region can hardly afford to ignore. Singapore has joined the list of nations that has begun to pay attention to its entrepreneurial sector, recently signing a Memorandum of Understanding (MOU) to foster collaborations and share ideas between both countries:

The agreement in a nutshell

The MOU was signed between Enterprise Singapore (Enterprise SG) and The Indus Entrepreneurs (TiE) Singapore at what many would call an opportune moment, a day before Indian Prime Minister Modi’s visit to Singapore. TiE is one of the largest Indian global entrepreneurship organisations that began in Silicon Valley, backed by an equally impressive funding pool. The inked MOU will kick-start an incubation programme that aims to foster collaboration between Singapore and Indian startups through jointly organised networking events, workshops and sessions with in-market mentors.

With the launch of the new agreement, the TiE will get the ball rolling by running a startup initiative in July 2018, with 10 Singapore startups to meet with a strategic list of Indian startups, corporates, mentors and investors while partnering and co-innovating solutions in the fintech, e-services and deep-tech arenas.

The Prime Minister’s visit also witnessed a separate MOU between Enterprise Singapore and National Skills Development Corporation (NSDC) India. The agreement will facilitate Singapore vocational training companies to expand into India, providing the skills needed across the beauty and wellness, F&B, construction and facilities management sectors.

Why India: Startup ecosystem’s meteoric rise

With a population of over 1.3 billion, India offers startups with a large target customer base and an equally expansive talent pool. These factors, together with access to a host of incentives that promote entrepreneurial growth, have contributed to the nation emerging into the third largest technology startup hub in the world.

Global giants have also boosted overall confidence in India’s startup scene, with companies such as Softbank showing confidence in the country through its second Vision Fund, aimed at providing capital to startups across the nation. In August last year, SoftBank signed its largest cheque in India to date, investing US$2.5 billion in country’s biggest e-commerce platform, Flipkart.

Prime Minister Modi’s government has taken on a pro-entrepreneur approach to promote the startup scene in the country. As part of the Startup India Action plan, new enterprises will be provided with regulatory and tax benefits as well as access to funding if they meet certain criteria.

The fact that there are over 300 million smartphones in the country also provides startups with a ready base of consumers to cater to. Experts predict the figure to rise over the next several years, with the over 1 billion Indians yet to own such devices. This provides promise for a new generation of consumers in the foreseeable future.

The Singapore–India startup relationship

Several Singapore startups have already acknowledged the potential that India has to offer in the startup sphere.

An example of this is ViSenze, an Artificial Intelligence company that develops breakthrough visual technology for e-commerce and digital businesses. The company cemented their foray into India’s online marketplace in 2015 via a strategic partnership with industry giant Flipkart, enabling customers to search across the fashion category by uploading photos instead of guessing keywords. ViSenze is also working with Indian based fashion e-retailer Myntra to assist its over seven million users to navigate the store via image recognition.

One of Singapore’s sovereign wealth funds Temasek has also been said to be in talks with Indian ride hailing company Ola to be part of a funding round totalling US$1 billion.

With Singapore fully aware of the fact that India offers a ready and growing platform of customers, more startups will begin to expand their reach by scaling the rapidly emerging country over the next several years.

Aside from its sheer population and inviting business environment, the world’s largest democracy provides startups a stable environment, bolstered by a government that seems to be on-board to create a community that will compete with leading global hubs.