India, Philippines decide to commence negotiations on bilateral trade pact

India and the Philippines on Thursday agreed to commence negotiations on a bilateral preferential trade pact and vowed to step up defence cooperation, especially in the maritime security domain, amid China's increasing muscle-flexing in the South China Sea.

In the extensive talks between Secretary for Foreign Affairs of the Philippines Enrique A Manalo and External Affairs Minister S Jaishankar, the two sides also underlined the need for implementing the South China Sea verdict that was pronounced by a UN arbitration court in 2016.

The defence and security ties between India and the Philippines are on an upswing. In January last year, the Philippines concluded a USD 375 million deal with India for the procurement of three batteries of the BrahMos cruise missile.

A joint statement said both sides underlined that India and the Philippines have a shared interest in a free and open Indo-Pacific and emphasised the need for peaceful settlement of disputes and for adherence to international law, especially the UNCLOS (UN Convention on the Law of the Sea) and the arbitral award on the South China Sea.

The UN's Permanent Court of Arbitration, adjudicating the Philippines' case against China's territorial claims in the South China Sea, ruled in favour of Manila. However, China refused to accept the verdict.

There have been growing global concerns over China's sweeping claims of sovereignty over all of the South China Sea, a huge source of hydrocarbons. Several countries in the region including Vietnam, the Philippines and Brunei, have counterclaims.

In a tweet, Jaishankar described the talks at the fifth India-Philippines Joint Commission on Bilateral Cooperation as "productive and comprehensive" and said the dialogue focused on boosting ties in areas of defence, counter-terrorism, health and trade.

The statement said both sides expressed keen interest to continue working in the defence sector, including through opening of a defence attach office in Manila and considering India's offer for concessional Line of Credit to meet the Philippines' defence requirements, acquisition of naval assets, and expansion of training and joint exercises on maritime security.

It said Jaishankar and Manalo agreed to commence negotiations on a bilateral preferential trade agreement, as they noted with satisfaction the growing pace of bilateral trade, which had for the first time crossed the level of USD 3 billion in 2022-23.

The two sides also agreed to work together at the United Nations to attain concrete outcomes on UN Security Council reforms as soon as possible.

"Given the urgent need for UN Security Council reforms, both sides agreed to the expansion in both permanent and non-permanent categories of membership, and reforms of the working methods of the UN Security Council," the statement said.

The statement said the two sides emphasized the need for expanded connectivity and ease of travel to enable the growth of tourism, trade and investment and people to people exchange between the two countries.

It said Jaishankar and Manalo encouraged early negotiations for a bilateral mutual legal assistance treaty on criminal matters and a treaty on transfer of sentenced persons.

"Our agenda today covered defence, maritime security, counter-terrorism and transnational crimes. As also our growing economic ties, including in trade & investments; development cooperation; health & pharma; tourism; air services; agriculture; fintech; S&T and space cooperation," Jaishankar tweeted.

He said the importance of greater people to people ties, specifically in tourism and education sectors, was noted.

Manalo, the Secretary for Foreign Affairs of the Philippines, arrived here on Tuesday on a four-day visit.

In a lecture at a think-tank on Wednesday, Manalo said the Philippines wants to develop a "very robust" defence partnership with India and is looking forward to procuring military hardware from it.