ECONOMIC relations between India and the Philippines are expected to be reinvigorated if the visit this week by Indian Prime Minister Narendra Modi leads to easing restrictions.
While eager to Modi’s visit, officials of the Philippines-India Business Council Inc. (Pibci) see relaxation of foreign equity restriction as key to unlocking the full potential of improving business ties between the two Asian countries.
“This will be the first time in a very long time that we have an Indian Prime Minister going to the Philippines, and this will help to open the bridge between the two countries,” Pibci Chairman Johnny Chotrani said in a recent interview. “There are a lot of venues for cooperation that we see opening up.” Modi is expected to participate in the 31st Asean Business and Investment Summit and the 12th East Asia Summit to be held in Manila.
During the week, Modi will be officially inviting President Duterte to India to celebrate the latter’s Republic Day celebrated on January 24, Chotrani said.
With the Association of Southeast Asian Nations looking at deepening economic ties via multiple agreements, the time is ripe for the two countries to strengthen ties even bilaterally, he added.
“In the bloc, it would make sense for the Philippines to want to be dominant in certain industries. A good way to do that is to partner up with another who [is] already very good at particular industries,” Chotrani added. “India is a leader in information technology [IT]; so we can complement each other on particular areas in IT.”
The council chairman said IT is particularly of interest from Indian investors, as the strong English-speaking skills and the available space here in the Philippines is an edge over the limited land area of English-speaking countries in the Asean like Singapore.
Aside from IT, other areas for cooperation are in pharmaceuticals and agriculture, Chotrani said. Crucial to this improved business relations, however, is the foreign-ownership provision in the Philippine Constitution, he added.
“We are looking at the Philippines to also relax their rules, because [the] ‘60-40’ rule is one of the issues that bothers a lot of Indian investors. An Indian multinational company would find it hard to come here and just own 40 percent. They’d like more equity; at least 50,” Chotrani said. “This is all about unshackling policy benefits for the Philippines.”
He expects trade and investments between the two countries to “continue to steadily improve” if this rule is “reformed.”
The total trade between Philippines and India amounted to $1.8 billion last year, taking a 1.3-percent share of total Philippine trade. The balance of trade is in favor of India, with the Philippines posting a trade deficit of $1.4 billion.
As of 2016 India stands as the 14th-largest trading partner of the Philippines.
