Bilateral Trade And Economic Relations
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Bilateral Trade and Economic Relations

I BILATERAL TRADE

India and Philippines signed a Trade Agreement in 1979. Bilateral trade was slow between the two countries till the late nineties and then posted a positive growth after the deepening relations between India and ASEAN in the context of India’s ‘Look East Policy’’. The Agreement on Trade in Goods was signed 13 August 2009 between India and ASEAN and which was fully implemented in 2011 helped in increase in bilateral trade. India is part of the Regional Comprehensive Economic Partnership Negotiations (RCEP) which will also support and contribute to economic integration. Bilateral trade presently stands at US $ 1.8 bln (Source: MOC for CFY 2015-16). Existing full potential has not been realized and there is need to further facilitate trade between the two countries especially since both economies are growing and are complementary to each other

2. Major items of Indian exports are Vehicles, and parts and accessories, pharmaceutical products, Mineral Oils, frozen buffalo meat, Boilers & Mechanical appliances, Cereals. rubber & rubber products; oil seeds and olea, electrical & electronic machinery and equipment; organic chemicals, iron, steel and cotton, etc.

Top EXPORT products of Trade ( Source: Ministry of Commerce) ( In US $ Millions)

Sl No

HS Code

Commodity

2009-10

2010-11

2011-12

2012-13

2013-14

2014-15

2015-16

2016-17

(Apr-Oct)

1

87

Vehicles other than Railway or Tramway Rolling stocks, and part and accessories thereof.

61.48

122.59

152.28

168.5

199.49

223.87

231.31

134.64

2

84

Nuclear Reactors, Boilers, Machinery and Mechanical Appliances; parts thereof.

33.53

39.96

51.8

68.34

80.21

106.73

184.68

120.71

3

30

Pharmaceutical Products

49.15

67.58

84.96

106.36

121.81

135.06

175

106.24

4

27

Mineral Fuels, Mineral Oils and Products of their distillation; Bituminous substances; Mineral Waxes.

5.29

5.23

10.26

10.33

62.69

118.72

43.41

70.82

5

2

Meat & Edible Meat offal

91.65

116.06

113.94

104.62

119.13

115.84

116.44

62.23

6

40

Rubber and Articles thereof

51.36

70.86

79.3

109.84

88.16

93.43

73.8

42.77

7

12

Oil Seeds and Olea. Fruits; Misc grains, Seeds and Fruit; Industrial or Medicinal Plants; Straw and Fodder.

60.33

57.04

80.06

90.99

76.52

83.22

67.59

39.28

8

85

Electrical Machinery and Equipment and parts thereof; Sound Recorders and Reproducers, TV image and Sound recorders and Reproducers and parts.

46.49

45.12

54.45

56.61

62.34

57.95

78.77

38.63

9

29

Organic Chemicals

29.3

27.79

35.87

34.84

41.77

44.64

37.44

23.33

10

73

Articles of Iron or Steel







28.82

19.65


3. Major imports from Philippines are
electrical and electronic machinery and equipment; boilers & mechanical appliances etc; vehicles; Animal & Vegetable fats. paper products; organic chemicals; fertilizers; inorganic chemicals; optical photographic instruments; rubber and articles thereof and iron and steel.

Top IMPORT products of Trade ( Source: Ministry of Commerce) ( In US $ Millions)

Sl No

HS Code

Commodity

2009-10

2010-11

2011-12

2012-13

2013-14

2014-15

2015-16

2016-17 (Apr-Oct)

1

85

Electrical Machinery and Equipment and parts thereof; Sound Recorders and Reproducers, TV image and Sound recorders and Reproducers and parts

129.99

193.41

126.36

230.01

146.36

122.56

145.48

88.28

2

84

Nuclear Reactors, Boilers, Machinery and Mechanical Appliances; parts thereof

26.94

30.89

70.6

91.78

75.59

73.04

96.9

53.59

3

74

Copper and Articles thereof.







0.62

21.16

4

88

Aircraft, Spacecraft, and parts thereof







0.14

19.35

5

90

Optical, Photographic Cinematographic measuring, checking precision, medical, or surgical Inst. And apparatus parts and accessories thereof.

9.96

8.15

13.53

14.61

16.77

20.69

20.42

15.79

6

15

Animal or Vegetable Fats and oils and their cleavage products; pre edible fats; Animal or Vegetable Waxex.

0.07

0.05

0.08

--

21.69

24.08

16.53

11.39

7

87

Vehicles other than Railway or Tramway Rolling Stock, and parts and accessories thereof.

21.9

36.09

54.52

62.37

34.54

41.61

23.31

8.28

8

23

Residues and waste from the Food Industries; prepared animal foder







13.23

6.76

9

29

Organic Chemicals







6.88

6.56

10

68

Articles of Stone, plaster, cement, asbestos, mica or similar materials







8.09

5.9


II INVESTMENTS & TRADE

a) Indian Investments in the Philippines

5. India and Philippines signed an Agreement on Avoidance of Double Taxation and Prevention of Fiscal Evasion in 1990, and an Agreement for Promotion and Protection of Investments (BIPPA) in 2000 which is now being revised. Indian investment in the Philippines is mainly in the areas of textiles, garments, IT& ITes, steel, Airports, chemicals, Automobiles and pharmaceuticals. Some of the major Indian investments in Philippines are the Aditya Birla Group in textiles & Chemicals ( Indo Phil Group), Ispat Group in Steel. A recent major entrant has been the GMR group Ltd, who in collaboration with Megawide, won the bid in April 2014 for upgrading and running the Cebu-Mactan airport project for the next 25 years and have commenced operations in November 2014. Tata Motors and Mahindra have made their presence felt in the Automobile sector.

6. Collaboration in the BPO sector has grown exponentially in the last few years. Several Indian IT companies have already set up BPO operations in the Philippines and these include companies like WIPRO, TCS, L&T Infotech, Innodata, IL&FS Genpact, Infosys, HIGS (Hindujas), Tech Mahindra etc. This close partnership in IT & BPO has become a win-win situation for both countries.

7. Similarly we have a strong presence in Pharma (Generics) where Pharma majors like Dabur Pharma, Lupin, Torrent, Zydus Cadilla, Claris Life sciences have set up liaison office to promote their products. Lupin has also acquired a stake in a local company.

8. Estimated Indian investments in the Philippines are valued at more than US $ 650 mln. During the last few years, Indian companies have successfully executed some small and medium sized projects in the Philippines. Kalpataru and Kamani Engineering Corporation are presently engaged in executing transmission line projects in the Mindanao regions of the Philippines. Other engineering firms have been repairing and setting up sugar plants for Philippine companies.

Potential sectors for Indian companies in Philippines:

  • IT-non voice sectors, particularly in medical, financial and legal services, game development, engineering design in manufacturing, software development

  • Pharma: Generics, medical equipment, vaccine, OTC, oncology and high end medicines, herbal medicines etc

  • Infrastructure- Airports, Ports, Railways, Roads etc - through the PPP route

  • Manufacturing: Electronics, Ship building, tools and dyes, furniture, garments, Power and Transport

  • Automobiles

  • RE Sector

  • Agribusiness: Cacao, Coffee, mangoes, bananas, coconuts, rubber, bamboo, fruits and nuts, palm oil and other high value crops.

  • Tourism: Hotels, Services, management etc

  • Services and logistics.


II (b) Philippine Investments in India

9. Philippine investments in India are modest and in telecommunications, IT, real estate and reprocessing of waste and human resource development (management education). Some of the companies operating in India are: V.Merida (processing of waste), Ayala (Construction & ITES); Philippine Wireless (Paging service), SPI Technologies (ITES); Del Monte & Liwayway (Food processing), Lloyd Lab (Pharma) etc.

I

III BILATERAL MECHANISMS

  • JWG: The India-Philippine Joint Working Group (JWG) on Trade and Investment has been meeting fairly regularly under the joint Chairmanship of our Commerce Secretary and Philippines Undersecretary for Trade and Industry. The 12th Joint Working Group on Trade and Investments was held in New Delhi on 31 March 2016,. Both sides noted with satisfaction that the bilateral trade has been increasing on a sustained basis but acknowledged that there was more scope.

  • JBC: The India-Philippine Joint Business Council (JBC) was set up in 1994 and it has met seven times starting in 1995. The nodal agencies are the Philippine-India Business Council under PCCI on the Philippine side and the FICCI on the Indian side. FICCI led a delegation of 12 businessmen to Manila from March 3-6, 2014. The delegation met the Secretary of Trade & Industry, various local chambers of commerce and businessmen during their visit.

 IV Trade delegations

10. Trade delegations have been encouraged to Philippines to facilitate direct interaction with Filipino businessmen. In the last few years, several trade delegations like FICCI, Tobacco Board, Chemicals & Allied Products Export Promotion Council, Engineering Export Promotion Council, Basic Chemicals, Pharmaceuticals & Cosmetics Export Promotion council, Solvent Extractors Association, Pharmaceuticals, Export Promotion council, Synthetic and Rayon Textiles Export Promotion Council, Cotton Textile export Promotion Council, Indian Chamber of Commerce, Electronics and Computer Software Export Promotion Council of India, Nasscom, Pharmaceuticals Export Promotion council, FIEO, World Trade Centre have visited Philippines. 50 Indian companies under the aegis of ASSOCHAM participated in the Asia Food Expo from 9-12 September 2015. A 12 member delegation from AICCI, Tuticorin visited Philippines on an exploratory visit in November 2015. Earlier in March 2015, a 26 member delegation from Pharmexcil had visited Philippines and held a successful BSM. A 12 member delegation from Plexconcil visited Manila for BSM from Feb 8-10, 2016 followed by a ten member delegation from CAPEXIL from 22-24 September 2016. Similarly a five member delegation from Soya Bean Processors Association visited from 22-23, 2016. About forty companies led by ASSOCHAM again participated in AFEX food fair ‘from September 7-10, 2016 followed by a ten member delegation from FIEO for Manila Fame Lifestyle Exhibition from October 20-22, 2016. Similarly Philippine firms have been participating in Indian trade exhibitions especially in the Pharma/ IT/Automobile and Handicrafts sector.

 V)     Tourism

10)  India offers e-Tourist visa to  Filipino nationals. However, Indian nationals do need a visa to come to Philippines. The flow of tourism is not much and is hampered by lack of direct flights. Presently the overall tourism figures total about 76,000.

January 2017



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