Amidst Trump’s tariff threat, the Philippines’ President Marcos Jr. visited India from 4th to 8th August, making it his longest state visit abroad. Both sides elevated their ties to the Strategic Partnership (SP) during the visit. With this elevation, India became the fifth country to have SP with the Philippines, besides Japan, Australia, South Korea, and Vietnam. Citing his encouraging exchanges with Indian leaders and business executives, Marcos asserted that the visit would lead to a “new beginning” for India-Philippines relations. The visit came against the backdrop of the intensification of the India-Philippines defense partnership.
Marcos’ visit coincided with the first-ever maritime cooperative activity (MCA) between India and the Philippines. The two-day joint naval exercise featured various high-level naval operations to strengthen tactical coordination and joint maritime capability. The MCA was held near the Scarborough Shoal, which China has occupied since 2012. Although the India-Philippines relationship has mainly been driven by the shared threat perception of China. However, the geographical distance and limited economic cooperation constrain the relationship. Thus, Marcos’ visit aimed to strengthen economic cooperation to make the India-Philippines relationship sustainable and more efficient. His visit to Bangalore, known as the Silicon Valley of India, signifies that.
India and the Philippines have intensified their defense engagement in the last few years. This can be inferred from the sale of Brahmos missiles to the Philippines, the change in India’s stance on the 2016 Arbitral Award on the South China Sea (SCS), the establishment of Track 1 maritime dialogue, and now the first-ever MCA. However, the economic ties between the two have rather remained limited.
India and the Philippines do not share much bilateral trade, just $3.5 billion in 2023-24. India’s trade with the Philippines is around 2% of its total trade with the Association of Southeast Asian Nations (ASEAN). According to the ISEAS’ State of Southeast Asia Survey Report 2025, India has zero percent economic influence in the Philippines. Thus, in light of that, strengthening economic cooperation becomes an imperative to enhance the bilateral relationship. Moreover, the implementation of Trump’s tariffs is necessitating countries to diversify their economic ties, and India and the Philippines hold immense untapped potential in the economic domain.
According to Philippine Foreign Affairs Secretary Enrique Manalo, India holds untapped potential of $577 million for the Philippines’ exports. The delay in the conclusion of the Preferential Trading Agreement (PTA), the talks for which have been ongoing since June 2023, remains the predominant reason behind the inadequate trade between the two countries. However, during the visit, both countries agreed to adopt terms of reference for PTA negotiations. The PTA aims to reduce and eliminate tariffs on products of mutual interest. Its successful conclusion could lead to growth in sectors like automobiles, battery technology, and healthcare.
As a developing country, the Philippines requires economic investments in its infrastructure development. As part of its Belt and Road Initiative (BRI), China has made significant investments in the Philippines’ infrastructure sector. For instance, China pledged to invest around $5 billion in building three railway lines (two in Luzon province and one in Mindanao province) in the Philippines. However, China has not dispensed the funding it pledged to the Philippines due to the dispute in the South China Sea (SCS). In November 2023, the Philippines dropped out of China’s BRI-funded projects because of a delay in funding.
This is where India can step in to aid the Philippines’ infrastructural development push. Notably, the Indian infrastructure conglomerate GMR Group has expressed interest in investing in the Marcos administration’s Build Better More Program, especially in airport and energy projects, including the Sangley airport project in Cavite. Further, Indian firms can collaborate with American or Japanese firms to develop the Luzon Economic Corridor. The corridor connecting Manila, Batangas, Subic Bay, and Clark with a ports and railways network aims to position the Philippines as a key hub for export manufacturing companies.
Green technology is another promising area of economic cooperation between the two countries. The Philippines is the world’s second-largest producer of nickel (behind Indonesia), with the majority of its nickel being exported to China (98%). Its nickel exports are valued at $1.95 billion, making it a critical player in the lithium-ion battery production. With the adoption of Electric Vehicles (EVs) rising in India and the government pushing for self-reliance in the battery manufacturing sector, securing a stable supply of raw materials like nickel becomes a prime imperative. While India currently imports $707 million worth of nickel from Russia, Japan, and Norway, importing it from the Philippines will increase stability and realignment in the supply chain.
Thus, India and the Philippines share a lot of common areas of interest in economic cooperation. This is reflected in Marcos’ visit to Bangalore, where he met with business leaders, which resulted in the signing of 18 business agreements spanning across sectors like renewable energy, healthcare, education, information technology, etc. The visit secured $446 million worth of direct investment in the Philippines, which could lead to potential investments from India reaching up to about $5.7 billion. This becomes important in light of Marcos’ failure to bring any assurance of the US investments from his visit to Washington in July.
Since India is resetting its relations with China after the deterioration post-Galwan clash in 2020, and the Philippines has a history of flip-flopping its relations with China. Therefore, vigorous economic cooperation is required to China-proof the India-Philippines relationship, meaning that benign relations with China do not pause the positive trajectory of bilateral relations between India and the Philippines. Marcos’ visit to India was a promising attempt to achieve that.
