The prime minister highlighted the quality of IIT-IIM alumni as he underscored the need for Singapore to continue bringing in foreign talent to meet manpower demands.

The IITs and the IIMs are the top institutions in India and securing a place in them is comparable to getting into the Massachusetts Institute of Technology, Stanford University or Harvard University, Lee told Channel News Asia in a wide-ranging interview before stepping down as head of the government on May 15.

The professionals from there (IIT-IIM Alumni) have formed associations in Singapore and hold functions from time to time. "If I can get such a pool, come here and work here, it is a tremendous plus for us," he said.

Citing the community of workers from India here now, Lee said Singaporeans notice their influx as the numbers are "not small".

However, they are talented individuals and are very valuable to Singapore, and "we should welcome them as we manage the flow".

Singapore scouts talent globally and countries like China, India, Bangladesh, Sri Lanka and other Southeast Asian nations, especially neighbouring Malaysia, are the main sources.

Lee also pointed out that those arriving from abroad will have to be properly integrated into the city-state's multi-racial society.

In the interview, he said that managing the "inherent tensions" between wanting social cohesion and bringing in immigrants is the "most difficult" issue he has had to deal with.

Lee addressed the topic in the exhaustive interview taking stock of his 20-year tenure as prime minister, ahead of his handover to his deputy Lawrence Wong next Wednesday.

"Making people feel comfortable and not feel threatened or having social tensions build up, that is something which is going to be very difficult to manage because we do not have a lot of manoeuvring room on the downside. You cannot say I (will) send off all the foreign workers, and then tomorrow we will be okay."

Singapore needs talent to stand out in the world, he said. "And you can never have enough talent."

While Lee acknowledged that Singaporeans have reasonable concerns over the social impact of the new arrivals, he pointed out that there are jobs such as in construction that Singaporeans do not want.

Singapore's reliance on foreign workers in the construction sector came into the spotlight at the height of the pandemic as a manpower crunch caused by border restrictions and COVID-19 quarantines led to delays for many housing projects.

In other sectors, more manpower is needed to perform the tasks on a larger scale beyond the jobs that Singaporeans can fill, said the 72-year-old premier, Singapore’s third prime minister since the 1965 independence.

"And if I can have 10 per cent or 20 per cent more engineers or technicians or healthcare workers, I can do a lot more things, I will be more productive. But I cannot take away 10 per cent of people and then become 10 per cent smarter and faster just on my own," he said.

In Singapore, the city is the country, unlike other major cities such as London. So, there must be cohesion and a strong sense of value and identity, he said.

Bringing in foreigners can enrich the identity of Singapore society, stressed Lee.

"They bring talent, experience, a different perspective on things. But at the same time, you dilute that, at least temporarily, because they do not have the same background," Lee said.

He gave the example of Singaporean-Chinese and Singaporean-Indians being different from those arriving from China and India.

Lee noted that some countries' foreign talent strategies are not viable for the Singapore context. For instance, the United Arab Emirates brings in many foreigners, while using its wealth derived from its oil reserves to cater to its resident population.

But Singapore has to bring in talent “in a controlled way” which complements local workers and professionals rather than putting them out of jobs, said Lee.

It also has to be done in a manner that does not dilute the country's "social norms and morals and the way Singapore works, and cause frictions and conflict", he added.

It is also crucial for Singaporeans to understand the importance of bringing in foreign talents, and to make the effort to be accommodating and welcoming, said Lee.

Singapore's population is ageing rapidly. By 2030, about one in four Singaporeans will be aged 65 and above.

Lee said that with the shortage of workers in the Singapore economy, older workers should be valued and tapped on.

Jobs have to be adapted so that older workers can perform those roles while workers need to be trained as they grow older so they can take up the new openings, he said.