A man walks in front of a building lit up in the colors of India’s national flag in Mumbai, India, Aug. 14, 2021. — REUTERS

By Alyssa Nicole O. Tan, Reporter

INDIA wants a preferential trade agreement (PTA) with the Philippines to accelerate investments and strengthen relations, according to its ambassador in Manila.

“While our trade has increased quite considerably, it is not keeping up with the growth in our respective economies,” Indian Ambassador Shambhu S. Kumaran said on the sidelines of a lunch meeting with BusinessWorld.

“I do feel that this is the right time to have an enabling preferential trade agreement. It will be quick, ambitious, but realistic,” he added.

The International Monetary Fund (IMF) sees the Philippine gross domestic product (GDP) expanding 5% this year, slower than the 7.6% growth in 2022. It also expects India’s economy to slow to 6.1% in 2023, from 6.8% last year.

Mr. Kumaran said the Philippine and Indian governments have agreed, in principle, to work on a preferential trade agreement.

“There is clear interest and intent for both governments to start this discussion. We’ve exchanged the terms of reference, and I’m hopeful that we’ll be able to pick up the negotiation process formally,” he said.

Initial talks on a PTA started in 2020, but negotiations have yet to formally begin.

“The government of India is very action-oriented and very result-oriented. We don’t believe in very long-winded processes,” he said, noting a free trade deal between India and the United Arab Emirates was concluded in three months.

“While I’m not suggesting that it can happen in the Philippine context, we will be very ambitious with regard to the timeframe,” he added.

In a statement sent to BusinessWorld, the Department of Trade and Industry said the Philippines is still awaiting comments from the Indian side before finalizing the terms of reference (TOR).

“We hope to conclude negotiations quickly given that we will be negotiating a preferential trade arrangement. Once the TOR is finalized, we can start negotiations,” the DTI said.

Data from the Indian Embassy showed sectors with potential for increased bilateral trade and investment include financial technology (fintech), agriculture, pharmaceutical, tourism, information and communications technology, among others.

Mr. Kumaran said a PTA is necessary to exploit business opportunities in both markets. He noted most Indian businesses in the Philippines have made long-term commitments here.

“It’s really companies looking at the Philippine market, working with global partners and building sustainable businesses for a long period of time,” he said. “We are looking at the Philippines as a country where we can build long-term, substantial and really solid partnerships with.”

Mr. Kumaran said the “real” driver of Indian-Philippine relations is the economic partnership.

According to the Indian Embassy, bilateral trade between the Philippines and India has increased to $2.84 billion (P156.53 billion) in 2022 from $1.74 billion (P95.75 billion) before the pandemic in 2019.