PHILIPPINE - INDIA RELATIONS: AN OVERVIEW

1. Consultative Mechanisms
   
   Policy Consultation Talks
   

   The Policy Consultation Talks between the two countries was established in 2000. The talks, which are held annually and conducted by the foreign offices of the two countries on the level of senior officials, aimed at discussing bilateral issues and regional and international issues of common concern.

   At the eighth (8 th ) round of the Policy Consultation Talks, which was held in New Delhi on 7 July 2005, both countries agreed to increase the multi-dimensional and comprehensive relations evolving between the Philippines and India.

   Security Dialogue
   

   The Philippines and India agreed to establish a security dialogue that would serve as a policy forum for sharing security assessments and for reviewing and giving direction to cooperation in bilateral/regional security and defense matters.

   The first RP-India Security Dialogue was held in Manila on 12 March 2004. One of the highlights of the first security dialogue was the signing of the RP-India Extradition Treaty by Department of Justice Acting Secretary Ma. Merceditas N. Gutierrez and Indian Ambassador to the Philippines Navrekha Sharma.
   

2. Recent Exchanges of High Level Visits
   
   State Visit of President Gloria Macapagal Arroyo to India, 3-6 October 2007
   

   President Gloria Macapagal Arroyo undertook a State Visit to India from 3 to 6 October 2007, being only the second Philippine President, after former President Fidel V. Ramos, to do so. She visited Mumbai, New Delhi and Agra.

   Business was the focus of her one-day stay in Mumbai, where she delivered a keynote address at a business meeting hosted by the Confederation of Indian Industries (CII), met with key officials of existing and potential investors in the Philippines, was hosted to a lunch reception by Mrs. Rajashree Birla, Philippine Honorary Consul General A.H. and Director of the Aditya Birla Group, and received a call bv Bollywood personalities. Her visit to Mumbai culminated with a high tea with the Governor.

   In New Delhi, President Arroyo was received by India's top leaders, including President Pratibha Patil and Prime Minister Manmohan Singh, with cooperation in the pharmaceutical, IT and dairy industries, counter-terrorism, the development of alternative sources of energy, air services, and ASEAN-India cooperation topping the agenda of their meetings.

   The President also addressed a Business Meeting in New Delhi and Mumbai co-sponsored by the Associated Chambers of Commerce and Industry of India (ASSOCHAM), the Federation of Indian Chambers of Commerce and Industry (FICCI), and Confederation of Indian Industries (CII).
   
   Visit of Prime Minister Manmohan Singh, 14 January 2007
   
   In January 2007, Prime Minister Manmohan Singh visited the Philippines to participate in the 5 th ASEAN-India Summit and 2 nd East Asia Summit in Cebu City.

   President Gloria Macapagal Arroyo met with Prime Minister Singh on 14 January 2007 before the holding of the ASEAN-India Summit. The two leaders discussed on strengthening cooperation in the fields of dairy production, importation of affordable medicines, and combating terrorism. The two leaders also exchanged views on bilateral, regional and multilateral issues of mutual concern.
   
   Visit of the Indian President Kalam to Manila, 3-6 February 2006
   

   Indian President A.P.J. Abdul Kalam made a State Visit to the Philippines from 3 to 6 February 2006. The State Visit of President Kalam was meant to reciprocate President Fidel V. Ramos's State Visit to India on­­­­ 2-5 March 1997.

   One of the highlights of the visit was the signing of four (4) important bilateral agreements between the Philippines and India, namely: Agreement on Cooperation in the Field of Tourism; Agreement on Cooperation in Agriculture and Related Fields; Agreement Concerning Defense Cooperation; and Agreement between the Philippine International Trading Corporation and Lob International on the Importation of Pharmaceuticals.

1. Consultative Mechanisms
   
   Joint Working Group on Trade and Investment
   
   The 8th Meeting of the Philippines-India Joint Working Group was held in New Delhi in February 2004. This regular bilateral process reviews the status and assesses the progress of the two countries' cooperation on trade, investments, economic, technical, scientific, and technological activities.
   
   Joint Working Group on Agricultural Cooperation
   
   A Joint Working Group on Agricultural Cooperation (JWGAC) has been set up pursuant to Article IV of the signed RP-India MOU on Cooperation in Agriculture and Related Fields . There was a proposal that the first meeting of the JWGAC be held back-to-back or prior to the meeting of the Joint Working Group on Trade and Investment, since members of the former are also members of the Philippine delegation to the latter.
   
   Proposed Establishment of a Joint Commission for Bilateral Cooperation
   
   

   The establishment of a Joint Commission for Bilateral Cooperation is being proposed by both countries to further strengthen and develop the cooperation in the field of trade, economic, scientific, technological and other fields of cooperation. The proposed mechanism will be co-chaired by the two countries' Ministers for Foreign Affairs who will meet once in two years.

   Both countries signed the agreement to establish such joint commission during the State Visit to India of President Gloria Macapagal Arroyo in October 2007.
   
   
2. Investments
   

   The exchange of Instruments of Ratification of the Philippines-India Agreement on the Promotion and Protection of Investments was held in Manila on 29 November 2000. The Agreement, which was signed in January 2000 and ratified by President Joseph Estrada in April 2000, aims to enhance commercial, industrial, and other economic activities by providing favorable conditions for investments by nationals and companies of the two countries.

   As of January-June 2006, Indian's foreign direct investments to the Philippines amounted to US$500,000. Indian investments in the Philippines are mainly in the areas of textiles, IT, steel and Business Process Outsourcing (BPO).
   
   
3. Trade Statistics
   
   India ranked 22nd as RP trading partner, 28 th as an export market and 21 st as import supplier of the Philippines in year 2006 (Source: DTI-BOI) .
   
   Merchandise Trade
   

   For 2006, total RP-India trade amounted to US$459.68 million. The balance of trade with India decreased from US$344.29 million in 2005 to US$219.42 million in 2006.

   Philippine exports increased in 2006 to US$ 120.13 million worth of goods from US$86.12 million in 2005. Philippine imports decreased in 2006 to US$339.56 million from US$344.29 million in 2005.

   Major exports included parts of the electronic integrated circuits and micro assemblies, phosphoric acid, newsprint in rolls and sheets, portable digital automatic machines, cellular phones, etc.

   Imports, on the other hand, consisted of meat of bovine animals, other wheat, some finished products of iron or non-alloy steel, and wheat used as feed etc.

   For the last five years (2002-2006), the Philippines had trade deficits with India ranging from US$193.58 million to US$344.29 million.

   The products for promotion that were identified by BETP/DTI in India are metal parts and components, electronic components, processed fruits, ceramics, gloves and mittens, seaweeds and derivatives (carageenan), phosphatic fertilizers, chemicals like fatty alcohols, coconut & vegetable oils, refined glycerol (glycerine), and surface active washing or cleaning preparations.
   
   
   
   

   RP Trade with India FOB Value in US Dollars 2002-2006
   YEAR	EXPORT	IMPORT	TOTAL TRADE	TRADE BALANCE
   2002	89,328,181	428,561,717	517,889,898	(339,233,536)
   2003	101,853,158	304,291,444	406,144,602	(202,438,286)
   2004	89,396,414	282,951,620	372,321,034	(193,582,206)
   2005	86,120,431	344,297,461	430,417,892	(344,297,461)
   2006	120,130,519	339,556,250	459,686,769	(219,425,731)

   
   
   

   Philippine Merchandise Total Trade with India (in US$) January – June 2007
   Month 2007	TOTAL EXPORT	TOTAL IMPORT	TOTAL TRADE
   January	5,687,594	50,132,457	55,820,051
   February	9,608,854	34,052,371	43,661,225
   March	21,931,573	34,899,088	56,830,661
   April	19,153,402	41,968,636	61,122,038
   May	31,121,893	33,630,769	64,752,662
   June	22,775,238	32,504,691	55,279,929
   Total	110,278,554	227,188,012	337,466,566
   Source: BETP-DTI Tradeline Philippine Center

   
   

Among the first agreements concluded by both countries were: Air Services Agreement signed in 1949, Cultural Agreement signed in 1969 and entered into force in 1973, the Memorandum of Understanding for Scientific and Technical Cooperation in Agriculture between Indian Center for Agricultural Research and the Philippine Council for Agriculture, Forestry and Natural Resource Research and Development signed in 1976; Memorandum of Agreement on Trade signed on 29 May 1979; the Basic Agreement on Scientific and Technological Cooperation signed on 8 April 1987; an Agreement on Economic and Technological Cooperation signed on 3 August 1990; the Convention on the Avoidance of Double Taxation and the Prevention of Fiscal Evasion signed on 12 February 1990; and the Agreement for Cooperation on the Utilization of Atomic Energy for Peaceful Purposes signed on 29 April 1991.

Both countries signed the RP-India Extradition Treaty in 2004 . This is yet to be ratified by the Philippines and currently, arrangements for its ratifications are being made. A Memorandum of Understanding (MOU) between the Philippines and India concerning Air Services was signed on 21 July 2005. This MOU serves as an amendment to the existing Air Services Agreement between the Philippines and India, which was concluded in 1949. The said MOU has been ratified by the Philippine side on 19 December 2005.

During the 2006 State Visit to the Philippines of Indian President A.P.J. Abdul Kalam, four important agreements were signed, namely:

• Agreement on Cooperation in the Field of Tourism. This agreement seeks to increase the volume of tourists from the two countries and should benefit the Philippines, India being the fifth largest outbound tourist market in the world.
  
  
• Agreement on Cooperation in Agriculture and Related Fields. The MOA seeks to promote the exchange of agricultural materials and information/technology, the exchange of agricultural scientists, experts and trainees, the organization of symposia and conferences, etc. Through this MOA, the Philippines can tap India's expertise in buffalo breeding, dairy development, and other fields where India possesses comparatively better agricultural know-how.
  
  
• Agreement Concerning Defense Cooperation. This agreement provides a legal framework for defense cooperation between the Philippines and India and is a key component in elevating bilateral relations to a more strategic level. The objective is to enhance defense cooperation through: exchange of military training expertise and information; exchange of military instructors/observers; exchange of visits of military aircraft and military naval vessels; exchange of information that is mutually beneficial, and other spheres of defense cooperation.
  
  
• Agreement between the Philippine International Trading Corporation and Lob International on the Importation of Pharmaceuticals . This is in line with efforts to expand the Philippines' supply base for quality medicines from lower-priced source countries like India. India has been most supportive of the Philippine government's pro-poor initiatives to make commonly bought medicines available at reduced prices.
  

During the State Visit of H.E. Gloria Macapagal Arroyo to India on 3 to 6 October, 2007, the following agreements were signed:

• Declaration on a Framework of Bilateral Cooperation between the Government of the Republic of the Philippines and the Government of the Republic of India
  
• RP-India Joint Declaration for Cooperation to Combat International Terrorism
  
• Agreement on the Establishment of a Joint Commission on Bilateral Cooperation
  
• Memorandum of Agreement on the Exemption of Visa Requirements for Holders of Diplomatic and Official Passport
  
• Memorandum of Understanding on Cooperation between the Foreign Service Institute of the Philippines and the Foreign Service Institute of India
  
• Memorandum of Agreement on Enhanced Cooperation in the Field of Renewable Energy
  
• Memorandum of Understanding on Cooperation in the Field of Health and Medicine
  
• Memorandum of Understanding Regarding the Utilization of a US$15 Million Credit Line between the Government of the Republic of the Philippines and the Export-Import Bank of India
  
• Memorandum of Agreement between the Philippine International Trading Corporation and the State Trading Corporation of India Limited for Trade between the Philippines and India