Two-way exchange between the two nations totals $5.4b in first half, setting the stage for full-year trade to top $10b.

INDIA has become Singapore's fastest-growing trade partner this year, overtaking even China - a country that has also notched up red-hot trade growth with the Republic in recent years.

Two-way trade between Singapore and India posted eye-popping growth of 54.3 per cent in the first half of this year, and is set to top $10 billion for the full year - easily eclipsing last year's record total of $7.9 billion.

At the half-year mark, two-way trade had already crossed the $5-billion level, at $5.39 billion, new data from IE Singapore, the Government's trade promotion agency shows.

The surge in Singapore- India trade this year took even IE Singapore by surprise.

The 54.3 per cent increase in the first half is a huge jump from the 16.2 per cent growth registered for the whole of last year.

India is the Republic's 12th-largest trading partner and also the 12th-biggest market for Singapore-made goods.

Its share of Singapore's total trade is still relatively small at 2 per cent, even though that is up from the 1.7 per cent share last year.

In comparision, the share of Singapore's top trading partner, Malaysia, is 15.1 per cent, according to IE Singapore's latest data.

The half-year trade report card shows that China's share of the Republic's total trade currently stands at 8.6 per cent.

Bilateral trade between the mainland and the Republic grew by 47.3 per cent in the first half, the second best growth rate this year after India.

'The main trade component that contributed to the 54 per cent increase in Singapore's total trade with India in the first half is imports from India, which expanded significantly by 112 per cent,' said IE Singapore's deputy director (research and statistics division), Mr Ho Shih Chuan.

'This significant increase can, in turn, be attributed to the almost fourfold increase in oil imports from India,' he told The Straits Times.

At the same time non-oil imports expanded by a huge 48 per cent in the first half.

The key non-oil imported products were mostly non-electronics goods such as precious stones, jewellery, aluminium, petrochemicals and pharmaceuticals.

Singapore's exports - comprising both domestic exports and re-exports - to India grew by 31 per cent.

Both oil and non-oil exports contributed to the rise, said Mr Ho.

The top non-oil exported goods to India are electronics products such as personal computer parts, integrated circuits and telecommunications equipment as well as chemical products comprising petrochemicals and primary chemicals.

'The acceleration in trade between India and Singapore signals positive and promising opportunities for Singapore businessmen to venture and expand their businesses,' said Singapore Business Federation (SBF) chief executive Cedric Chan.

'As we are moving into a more globalised economy, Singapore businesses ought to understand that helping countries like India and China in their growth and development is where Singapore's success lies.

'India is an important part of Singapore's strategy for the future. We see both India and China as big balloons rising. We will tether Singapore to both the markets,' he added.

Analysts said that with a comprehensive free trade agreement (FTA) between Singapore and India likely to be signed before the end of the year, bilateral trade would be strengthened even further.

Eight rounds of negotiations for the Comprehensive Economic Cooperation Agreement, as the impending FTA between the two countries is officially called, have already been held.

'In Singapore, there is renewed interest in India. In a number of recently concluded India-related events, organised or supported by the SBF, there were marked increases in the number of participants.

'The overall sentiment about doing business in India has definitely changed from caution to enthusiasm,' said Mr Chan.

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