Non-resident Indians and Singapore nationals will soon be able to trade in Indian scrips directly. The Centre is negotiating with Singapore for setting up an Indian stock exchange branch in Singapore.

In return, Indian citizens can look forward to trading in shares of companies listed on Singapore Exchange Ltd.

The Singapore exchange could be allowed to set up its branch in the proposed International Financial Centre in one of the special economic zones in India.

The International Financial Centre will house banks and insurance companies, besides capital market entities.

Officials told Business Standard that as part of the Comprehensive Economic Co-operation Agreement with Singapore, India recently discussed several financial sector initiatives, primarily in banking and capital markets.

An Indian delegation led by commerce secretary Dipak Chatterjee was in Singapore last week for parleys with its Singapore counterpart.

Singapore has also sought a clause in the agreement to ensure that Development Credit Bank of Singapore can open 200 branches in India.

The Centre on its part has demanded that the six Indian banks that have offices in Singapore should be permitted to open an equal number of branches there. A plan to share ATMs between Indian and Singapore banks is also being negotiated.

An official said the National Stock Exchange or any other large bourse could open a branch in Singapore.

"Fungibility issues need to be sorted, and we are studying a couple of options like allowing limited equity transactions in scrips listed in the overseas branch of the Indian bourse, to start with," he said.

The officials also said Indian companies planning to list abroad by issuing American Depository Receipts or Global Depository Receipts could now list through the proposed Singapore Exchange branch in India. "The proximity will result in substantial savings for companies," the official said.

If the discussions fructify, it will expand the scope of Finance Minister Jaswant Singh's decision in January 2003 to allow individuals, mutual funds and Indian corporates to acquire foreign equity.