Bilateral Trade And Economic Relations
Home>>Bilateral Trade And Economic Relations
 
Untitled Document

Embassy of India
Manila
Brief on India-Philippines Economic & Commercial Relations


           Introduction

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. The economic cooperation is expected to get a further fillip up after the India-ASEAN trade in Services and Investment is inked this year by the Phillipines ( Other ASEAN countries have all signed). 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 $ 1.6 bln. 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, frozen buffalo meat; pharmaceutical products, oil seeds and olea etc; rubber & rubber products; electrical & electronic machinery and equipment; boilers etc.; organic chemicals, iron, steel and cotton
                                                                                                                         (Value in Million US$)


Sl No.

HS Code

Product/Commodity

2003-2004

2004-2005

2005-2006

2006-2007

2007-2008

2008-2009

2009-2010

2010-2011

2011-2012

2012-2013

2013-2014

1

87

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

17.03

16.09

15.81

19.19

43.45

62.99

61.48

122.59

152.28

168.50

199.49

2

88

Aircraft, spacecraft, and parts thereof

-

-

-

-

-

-

-

-

-

-

122.84

3

30

Pharmaceutical products

19.36

14.02

22.19

25.18

30.01

39.65

49.15

67.58

84.96

106.32

121.84

4

02

Meat and Edible Meat Offal

46.90

43.67

60.82

60.76

88.66

100.13

91.65

116.06

113.94

104.62

119.13

5

40

Rubber & articles thereof

-

-

-

-

-

-

-

70.86

79.30

109.84

88.16

6

84

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

-

-

-

-

-

-

-

39.96

51.80

68.24

79.04

7

12

Oil seeds and olea fruits; misc, grains, seeds and fruit; industrial or medicinal plants; straw and fodder

-

-

11.42

27.01

47.34

35.64

60.33

57.04

80.06

90.99

76.52

8

39

Plastic and articles thereof

-

-

-

-

-

-

-

-

-

-

67.57

9

27

Mineral fuels, mineral oils and products of their distillation; bituminous substances; mineral waxes

-

-

-

-

-

-

-

-

-

-

62.69

10

85

Electrical machinery & equipment and parts thereof; sound recorders and reproducers, television image and sound recorders and reproducers, and parts

-

-

9.72

20.87

24.84

69.18

46.49

45.12

54.45

56.59

62.34

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

 

Major Imports to India from Philippines
                                                                                                    (Value in Million US$)


Sl No.

HS Code

Product/Commodity

2003-2004

2004-2005

2005-2006

2006-
2007

2007-2008

2008-2009

2009-2010

2010-2011

2011-2012

2012-2013

2013-2014

1

85

Electrical machinery & equipment and parts thereof; sound recorders and reproducers, television image and sound recorders and reproducers, and parts

21.07

19.03

27.52

39.44

47.67

95.99

129.99

193.41

127.30

225.16

146.32

2

84

Nuclear Reactors, Boilers, Machinery and mechanical appliances, parts thereof

52.34

80.72

116.62

50.27

21.03

13.34

26.94

30.89

70.60

96.02

75.59

3

87

Vehicles other than railway or tramway rolling stock and parts and accessories thereof

7.62

6.21

1.76

8.93

17.66

16.11

21.90

36.09

49.43

56.88

34.54

4

15

Animal or vegetable fats and oils and their cleavage products; pre edible fats; animal or vegetable waxes

-

-

-

-

-

-

-

-

-

-

21.69

5

90

Optical, photographic cinematographic measuring, checking precision, medical or surgical inst. and apparatus parts and accessories thereof;

-

-

2.56

3.19

3.82

7.48

9.96

8.15

15.39

14.31

16.82

6

40

Rubber and Articles thereof

-

-

-

-

-

-

-

4.73

6.57

6.59

11.95

7

25

Salt; sulphur; earths and stone; plastering materials, lime and cement

-

-

-

-

-

-

-

-

6.84

7.44

9.66

8

29

Organic chemicals

1.77

1.97

2.56

2.21

4.14

3.85

3.40

6.46

30.93

6.76

7.57

9

28

Inorganic chemicals; organic or inorganic compounds of precious metals, of rare-earth metals, or radi, elem. or of isotopes

-

-

-

-

-

-

-

-

-

-

7.44

10

72

Iron and Steel

-

-

-

-

-

-

-

4.57

5.27

7.74

6.68

(Source:DGCIS & Directorate General of Foreign Trade, India)

4. INVESTMENTS

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.  Indian investments in the Philippines are mainly in the areas of textiles, garments, IT& ITes, steel, Airports, chemicals and pharmaceuticals. Some of the major Indian investments in Philippines are the Aditya Birla Group in textiles & Chemicals, Ispat Group in Steel, DSCL Group in agri business etc. A recent entrant is 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. The project is worth Peso 17.5 bln. With the announcement of several PPP projects by the Government, mostly in infrastructure, and also a thrust to develop the Minadano region, there is enormous potential waiting to be tapped by Indian investors.

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, Genpact, Infosys, Intelenet; Aegis, HIMT (Hindujas), Tech Mahindra etc. This close partnership in IT & BPO has become a win-win situation for both countries and the growing investment in this sector is substantial.

Similarly we have a strong presence in Pharma (Generics) where Pharma majors like Dabur Pharma, Torrent, Zydus Cadilla, Claris Life sciences have set up liaison office to promote their products. Although the export of Indian Pharma products to Philippines is growing at an average rate of around 20%, its share in total Phama market of Philippines is around 3.5%. There is huge potential to expand this trade in Generics especially as President Aquino has strongly emphasized a 'Health for All' policy as one of his primary requirements of a viable development policy. Philippines can also be a launch pad for supply to the neighboring inland countries of Palau, Micronesia and Marshall Islands.

Tata Motors through their distributor, Pilipinas Taj, have introduced seven eco friendly diesel vehicles in the market including four sedans and three pick up utility vehicles.

Import of buffalo meat to the Philippines was approved by the Philippine Government in 1993 and is now a major component of our exports. Though it is used for the purpose of processing ( meat products), it is still not being allowed in wet (traditional) markets due to FMD concerns. Efforts are being made to address this issue.

Estimated Indian investments in the Philippines are valued at more than US $ 500 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.

Philippine investments in India are modest and in telecommunications, IT, real estate and reprocessing of waste and human resource development (management education).  It currently holds the 76th position as regards to FDI equity inflows from April 2000 and January 2013 which has been US $ 27.96 million as per data from DIPP. 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 ( Food processing) etc. Considering the strengths of Philippines, potential exists in areas such as Food Processing, Dairy, Construction and IT & ITES etc.

 

5.  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 11th Joint Working Group on Trade and Investments was held in Manila on April 29-30, 2013. Both sides noted the steady growth in bilateral trade and were pleased with the achievement of increase in bilateral trade.

 

  • 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.

6.         Trade delegations: 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 Softwre Export Promotion Council of India, Nasscom, Pharmaceuticals Export Promotion council and FIEO have visited Philippines. Similarly Trade Chambers here are being advised to participate in many Indian fairs.

 

7.     Tourism: India offers visa on arrival 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. Based on existing MOU, the Philippines Airlines had started direct flights in March 2011 which was later discontinued in 2013 due to commercial and economic reasons. The Indian carriers have not started operating in this sector.  A direct flight could contribute towards enhanced tourism and business links.

October 2014



Navigation