India-Philippines’ ties turning strategic after a strong post-pandemic growth

India Philippines relationship has been growing strong post pandemic

India’s trade and strategic engagement with the Philippines is set to strengthen further following the announcement of a strategic partnership between the two countries on August 5, sustaining the momentum of post-pandemic years.

The bilateral trade has grown 76 percent since 2013, with most of the expansion seen in the last five years. Since 2019–20, trade with the Philippines has surged 63 percent to $3.3 billion in 2024-25, according to trade data reviewed by Moneycontrol. Much of this growth has been driven by India’s imports from the Southeast Asian nation, with the Philippines’ share in India’s total imports having nearly doubled, as exports to India rose to $1.2 billion during this period.

India’s importance in the Philippines’ trade portfolio too has increased, as it now accounts for 1.7 percent of the Philippines’ imports and 1.5 percent of its exports, marking a high bilateral engagement.

The growth in trade has been accompanied by a realignment in key categories, with pharmaceuticals - dominated by Indian exports – up 65 percent since 2019, and trade in electrical machinery having nearly tripled following a sharp rise in Philippine exports to India.

The latest decision to move towards a strategic partnership will result in discussions over a preferential trade agreement - building on the Philippines’ existing membership in the ASEAN free trade framework - along with enhanced cooperation in defence and security.

Defence is emerging as a critical pillar of this relationship. The Philippines was the 28th largest global defence importer between 2019 and 2024, up from 45th in 2013-18 and 90th between 2007-12. While South Korea, Israel, and the United States remain its top suppliers, the Philippines placed notable orders from India in 2022, including for coastal defence systems and BrahMos naval missiles.

India, in turn, is gradually expanding its defence footprint across Southeast Asia. Between 2019 and 2024, it was the third-largest supplier of defence equipment to Myanmar, accounting for a 15 percent market share, and the sixth-largest to Vietnam with a 4.6 percent share in its imports. This is a significant rise from the 2013-2018 period, when India held only a 3.5 percent share in Myanmar and did not feature among Vietnam’s top 30 suppliers.

The newly announced strategic partnership is likely to accelerate this alignment, positioning the two countries for deeper cooperation at a time when the US is using tariffs as a tool to correct its trade deficits.