Prospects of Stronger Economic Cooperation between the ASEAN and India: Implications for the Philippines

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This Policy Note explores the prospects and opportunities of a dynamic ASEAN-Indian trade and investment relation. Specifically, it analyzes the greater economic relation between India and the Philippines in the services sector, particularly in information technology and business process outsourcing (IT-BPO). The ASEAN-India Trade in Services and Investment Agreement presents an opportunity to expand economic cooperation where ASEAN and India can capitalize on each other's strengths and natural endowments to take advantage of possible synergies in trade and services. Both India and the Philippines can use the agreement to exploit greater synergies in their respective IT-BPO services where they have developed world-class capabilities. India can tap the Philippines as an IT hub as it tries to expand toward the IT-BPO services chains. Together, both countries can provide IT and related services to the ASEAN region, which are critical services to enhance connectivity under the ASEAN Economic Community. To do this, one of the recommendations is to harmonize the taxation of IT-BPO and related services in both countries to reduce tax disparities and cost of doing business.