Arriving in Singapore by Air India at 7:30 am at Terminal 2 and next flight is Air Asia at 10:10 am, is the connection time for 2:40 minutes sufficient,as will need to clear immigration at singapore also.
You should be fine. Changi is a very efficient airport and it would be very unusual to wait more than 30 min in immigration.
However, Air India and Air Asia do not interline, so if you have checked bags, you will need to go through Immigration and Customs, collect them and check back in again, then pass through immigration again. This will require a visa and can be a bit time consuming, plus Air Asia requires that you are checked in one hour before your flight, so you may have trouble if your incoming flight is more than an hour or so late.
On the other hand, if you're traveling with hand luggage only and have already checked in online, all you need to do is walk or Skytrain from T2 to T1, no need to go through immigration at all.