India is making rapid inroads in the Philippines by establishing long-term trade and economic ties even as it plans to have a preferential trade agreement (PTA) with the country. This agreement is expected to deepen bilateral ties between both countries thereby boosting the strategic Indo-Pacific construct.
The Philippines, which is the third-largest economy in terms of GDP in the 10-member Association of Southeast Asian Nations (ASEAN), will be the first such country with which the Narendra Modi government is planning a trade pact. The PTA will seek to enhance market access and open up opportunities for greater trade in goods and services, official sources told ThePrint.
According to sources, India is planning such mini-trade deals with those ASEAN countries with which it does not have a trade pact. New Delhi is doing this to better integrate itself in ASEAN’s supply chain networks and development in trade infrastructure since it is not a part of the Regional Economic Partnership Agreement (RCEP) that is expected to come into effect later this year.
The RCEP is a mega trade pact between ASEAN member states (Brunei, Cambodia, Indonesia, Laos, Malaysia, Myanmar, the Philippines, Singapore, Thailand, Vietnam) and its five trading partners — China, Japan, South Korea, Australia and New Zealand.
In 2019, India had walked out of the RCEP over concerns that Chinese goods and services could flood its markets.
At a recent business conference, organised by Confederation of Industry (CII) and Philippines Chamber of Commerce and Industry (PCCI), India’s Ambassador to the Philippines Shambhu S. Kumaran said the new strategic construct of Indo-Pacific is a key focus for both countries and that the PTA will help in deepening ties between the two sides.
Meanwhile, sources added, the PTA will also be a “step in the right direction” to boost India’s ‘Act East Policy’, which is aimed at reducing China’s growing influence in the region.