About Us 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 which was signed on 13 August 2009 between India and ASEAN; and 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 $ 1.981bln (Exports from India-USD 1.487 bln, India’s imports USD 494 mln). For the current FY (Apl to Nov) it is USD 1.548 bln [Source: MOC for CFY 2016-17]. 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

2012-13

2013-14

2014-15

2015-16

2016-17

2017-18

(Apr-Nov)

1

87

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

168.5

199.49

223.87

231.31

243.97

162.70

2

30

Pharmaceutical Products


106.36

121.81

135.06

175

191.01

131.19

3

72

Iron and Steel





33.54

117.46


4

27

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

10.33

62.69

118.72

43.41

118.21

82.47

5

2

Meat & Edible Meat offal

104.62

119.13

115.84

116.44

100.51

78.97

6

84

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

68.34

80.21

106.73

184.68

168.8

78.06

7

40

Rubber and Articles thereof

109.84

88.16

93.43

73.8

78.07

42.81

8

12

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

90.99

76.52

83.22

67.59

66.83

37.48

9

85

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

56.61

62.34

57.95

78.77

63.28

35.18

10

29

Organic Chemicals

34.84

41.77

44.64

37.44

37.45

24.06

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

2012-13

2013-14

2014-15

2015-16

2016-17

2017-18

(Apr-Novz)

1

85

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

230.01

146.36

122.56

145.48

140.71

179.74

2

84

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

91.78

75.59

73.04

96.9

98.88

82.40

3

74

Copper and Articles thereof




0.62

36.41

65.22

4

71

Natural or Cultured pearls, precious or semiprecious stones, Pre metals, Clad with Pre metal and artcls thereof; Imit. jewlry; coin




74.82

20.56

37.04

5

90

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

14.61

16.77

20.69

20.42

25.12

17.07

6

87

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

62.37

34.54

41.61

23.31

16.15

14.94

7

23

Residues and waste from the Food Industries; prepared animal foder




13.23

13.01

12.34

8

89

Ships, Boats and Floating Structures






11.17

9

15

Animal or Vegetable Fats and Oils and their Cleavage products; Pre. edible fats; animal or vegetable waxex.


21.69

24.08

16.53

13.68

10.64

10

72

Iron and Steel





7.68

9.96

II INVESTMENTS & TRADE

a) Indian Investments in the Philippines

4. 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. (Bilateral Investment Promotion and Protection Agreement (BIPPA) signed between the two countries on 28 January 2000 which had an initial tenure of 10 years and came into force on 29 January 2001 expired on 28 January 2011 in accordance with Article 14 of the said Agreement. The Government of India has now proposed to terminate the Agreement and has proposed instead to enter into a new Bilateral Investment Treaty (BIT) based on the Model text for the Indian Bilateral Investment Treaty). 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.

5. 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&FSGenpact, Infosys, HIGS (Hindujas), Tech Mahindra etc. This close partnership in IT & BPO has become a win-win situation for both countries.

6. 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.

7. 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.

8. 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. The biggest investment for the Philippines to India is the LNG plant being set up in Kokinada (AP) by AG&P valued at US $ 200 million.

III BILATERAL MECHANISMS

10. 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.

11. 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 and again in November 2017 for the ASEAN Business and Investment Summit. The delegation met the Secretary of Trade & Industry, various local chambers of commerce and businessmen during their visit.

 IV Trade delegations

12. 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.

13. 50 Indian companies under the aegis of ASSOCHAM participated in the Asia Food Expo Manila 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. Federation of Gujarat Industries (FGI) Buyer Seller Meet, organized in Manila on 20th February, 2017 successfully. ASSOCHAM once again led a delegation of 48 Indian companies to participate in the Asia Food Expo Manila from 13-16 September 2017. Similarly Philippine firms have been participating in Indian trade exhibitions especially in the Pharma/ IT/Automobile and Handicrafts sector. IT Business Process Association of the Philippines (IBPAP) recently sent the largest foreign business delegation to the 25th edition of the NASSCOM India Leadership Forum held in /Mumbai from 19-20th Feb, 2017.

14. Prime Minister Narendra Modi visited Manila from 12-14th Nov, 2017 to attend the 31st ASEAN, EAS and 15th ASEAN-India Summits. Apart from the multilateral engagements, PM had several bilateral engagements which included a meeting with President Rodrigo Roa Duterte followed by signing of five MOUs. The five MoU’s signed during the visit were MoU on Defence Industry and Logistics cooperation, MoU between the Indian Council of World Affairs and the Foreign Service Institute of the Philippines, MoU on Cooperation in Agriculture and Related fields, MoU on Micro Small and Medium Enterprises between National Small Industries Corporation and Bureau of Small and Medium Enterprise Development, and MoU between Indian Council of Cultural Relations and University of Philippines setting up a Chair of Indian Studies in the Asian Centre of University of the Philippines.

15. A delegation of Govt of Assam led by Shri Naba Kumar Doley, Hon’ble Minister of State (IC), Youth & Sports and Cultural Affairs, visited Philippines from 18-20th December, 2017 in connection with “ Global Investment Summit-Advantage Assam” being held at Guwahati, Assam from 3-4 Feb, 2018. Embassy of India in association with ASEAN India Business Council (AIBC) organised a reception for welcoming the Hon’ble Minister at Dusit Thani Hotel, Manila on 18th December, 2017. The delegation gave a presentation on State of Assam and “Advantage Assam Summit”. Many leading Industrialists, Investors from different-2 sectors and Office bearers of various chapters of Philippine Chamber of Commerce & Industries etc attended the event.

16. A Philippine business delegation led by the Department of Trade and Industry in partnership with the Philippines-India Business Council of the Philippine Chamber of Commerce and Industry visited India from 21-26 January 2018, which coincided with the official state visit of President Rodrigo Duterte for the 31st ASEAN Leaders' Commemorative Summit. The delegation comprised of almost all major industries including pharmaceuticals and healthcare, IT and BPO, engineering and construction, manufacturing, food and beverage, and consulting. Various meetings with the Confederation of Indian Industries (CII) and the Federation of Indian Chambers of Commerce and Industry (FICCI) were also conducted.

17. The delegation comprised of over twenty (20) businessmen of top companies including TATA Consultancy Services-Philippines, AG&P, SPI Global, Hinduja Global Solutions, Blue Sapphire Group of Companies, New Era University, Filipino-India Commerce and Welfare Society, Inc., Foreign Buyers Association of the Philippines, and Medicines Transparency Alliance (Philippines), Inc. Prior to the major events, the delegation visited Indian multinational companies such as Hinduja Global Solutions, NASSCOM, Larsen and Toubro (L&T India) and Wipro. Various meetings with the Confederation of Indian Industries (CII) and the Federation of Indian Chambers of Commerce and Industry (FICCI) were also conducted.

18. The delegates also witnessed the presentation of business agreements to President Duterte, who assured the welfare of Indian businesses in the Philippines. The fruitful visit of President Duterte promises to yield about USD 1.25 Billion in investment pledges and create 10,000 new jobs for Filipinos, furthered cooperation in IT & BPO, renewable energy, and easier access to affordable medicines from India. An MoU between India and Board of Investment of the Philippines was signed in the presence of Prime Minister of India and the President of the Philippines.

 V)     Tourism

19. Indian as well as Filipino nationals do need a visa to visit each other’s country. However, India offers e-Tourist visa also to Filipino nationals. The flow of tourism is growing but is hampered by lack of direct flights. Presently the overall yearly tourism figures totals about 1,25,000 (around 1,00,000 Indians visited Philippines and 25,000 Filipinos to India). India is among the top ten sources of tourism to the Philippines and is one of the fastest growing market.

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Feb, 2018