Vietnam, India firms sign $2 bn deal for Hanoi highway project

New Delhi: Vietnamese Prime Minister Nguyen Tan Dung on Monday invited Indian investment in areas ranging from biotechnology and information technology to engineering and infrastructure, before overseeing a $2-billion pact being signed between Indian and Vietnamese companies for managing the key highway connecting Hanoi to the port city of Haiphong.

Dung, who arrived in New Delhi after a short stopover in the Buddhist pilgrimage centre of Bodh Gaya earlier on Monday, also said Tata Power Ltd, which last year bagged a $1.8 billion contract to develop two 660 MW thermal power plants in southern Vietnam, beating stiff competition from Korean and Russian companies, would be completing the project three years ahead of schedule in 2019.

Describing India and Vietnam as “two dynamic economies of Asia”, Dung said in a speech to Indian industrialists in New Delhi that the bilateral trade volume at $8 billion in 2013-14 was “modest” and not commensurate with the existing potential.

Indian investments in Vietnam total about $1 billion.

Dung’s two-day visit is aimed at forging deeper economic ties with India following a spike in tensions with China earlier this year over territorial claims in the South China Sea.

Senior officials of India’s ministry of external affairs have billed the visit as having primarily an economic focus.

But analysts in India say Dung’s visit—the third high-level exchange between India and Vietnam in as many months—is illustrative of Vietnam looking towards India as it grows increasingly wary of China.

External affairs minister Sushma Swaraj paid a visit to Vietnam in August, and President Pranab Mukherjee was there last month.

In his speech, Dung said Vietnam could act as a “bridge” for India to enable Asia’s third largest economy to make deeper inroads into the Association of South East Asian Nations (Asean) market. Vietnam is one of the 10 members that makes up the economic grouping that will be coalescing into an economic community, characterized by a single market and production base, besides “a competitive economic region”, as per the Asean website.

Textiles, leather, machinery and energy are other areas in which Vietnam is seeking Indian investments, said Dung.

Piyush Goyal, the minister of state for non-conventional energy, coal and power offered Indian expertise in setting up thermal and hydel power projects in Vietnam as well as Indian know-how in the field of non-conventional energy generation.

India and Vietnam signed a pact for the management of the six-lane expressway linking the Vietnamese capital Hanoi to the port city of Hai Phong.

India’s IL&FS will be managing the 105-km-long highway for a 30-year period under the terms of the pact signed with JSC Vietnam.

To give a boost to the business and tourism sectors, Jet Airways (India) Ltd announced the launch of flights connecting Delhi and Mumbai to Ho Chi Minh City starting 5 November.

Vietnam Airlines is expected to start flights to India next year, Indian and Vietnamese officials said.