KPMG urges firms to rewire operational strategy

Companies now have clear levers to strengthen competitiveness despite fractured trade flows.

Singapore companies facing rising costs, fractured trade flows, and rapid technological disruption now have clear levers to strengthen competitiveness, according to Ajay Kumar Sanganeria, partner and head of tax at KPMG Singapore.

Budget 2026 includes financial and strategic measures that enable businesses to rewire operations and thrive in a fragmented global market.

Supply chain resilience is a priority: multi-region sourcing strategies such as China+1 or ASEAN+India, dual supply chains for divergent trade blocs, and real-time digital visibility into shipments, inventory, and suppliers can help firms mitigate disruption.

Programs like the Enhanced Market Readiness Assistance (MRA) grants, Business Adaptation Grant (BAG), and Enhanced Enterprise Financing Scheme support these efforts.

Sanganeria said digitalisation and AI adoption remain critical. The Enterprise Innovation Scheme (EIS) now covers up to 70% of AI and productivity tool investments, paired with workforce upskilling initiatives under the National AI Council.

Companies building AI fluency can leverage predictive analytics, automate routine processes, and improve customer engagement whilst maintaining operational efficiency.

International expansion is still viable but requires strategic ecosystem integration rather than simple exporting. Budget 2026 raises the Double Tax Deduction for Internationalisation (DTDi) cap to $400,000 and expands qualifying activities.

Enhanced MRA support reduces the upfront costs of market entry. Singapore’s trade agreements, including the EU–Singapore Digital Trade Agreement and the Singapore–New Zealand Comprehensive Strategic Partnership, provide platforms for firms to scale overseas whilst managing compliance and risk.

Sanganeria says businesses that act now—combining supply chain rewiring, AI adoption, and targeted internationalisation—can convert disruption into competitive advantage, positioning themselves as leaders in a fragmented global economy.

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