New Delhi: India and Vietnam will aim to upgrade bilateral economic and strategic ties, identifying newer areas of cooperation for businesses and discussing the sale of military hardware including the India-Russia co-developed cruise missile Brahmos during a visit by Vietnamese Prime Minister Nguyen Tan Dung to India next week.
Dung’s visit starting 27 October will be the third high-level interaction between India and Vietnam in three months. Foreign minister Sushma Swaraj visited Hanoi in August to pave the way for a visit to Vietnam by President Pranab Mukherjee in September.
“Vietnam is a key partner in our Look East policy, and a trusted friend," said Anil Wadhwa, secretary (east) in the ministry of external affairs, at a discussion on India-Vietnamese relations in New Delhi on Monday.
He was referring to the determined diplomatic outreach begun by India in the early 1990s to forge closer economic and trade ties between India and Association of Southeast Asian Nations (Asean) that comprises Brunei, Cambodia, Indonesia, Laos, Malaysia, Myanmar, the Philippines, Thailand, Vietnam and Singapore.
Analysts see the rise of an assertive China as one of the reasons for countries in South-East Asia increasingly looking to India. “There are many countries in the region that are worried about China’s assertiveness," said D. Muni, a former professor of South Asian Studies at the New Delhi-based Jawaharlal Nehru University. “They want others like India to cushion them" because they cannot stand up to China on their own, he said.
China disputes sovereignty over the waters with Vietnam and has in the past objected to India’s presence in the South China Sea which it claims as part of its territorial waters. With India, China has an unresolved border dispute dating back to the 1962 border conflict.
On India-Vietnam relations, Muni said the strategic partnership was built on the pillars of Asian solidarity, nationalism, the fight against colonialism and any kind of hegemony in Asia. “Both India and Vietnam want multipolar Asia" and not one dominated by the US together with China or separately, he said.
According to Wadhwa, “Economic cooperation and engagement is the background of all cooperation...we greatly also value our economic interests in Vietnam." Bilateral trade at present amounted to $8 billion with both sides aiming to increase it to $15 billion by 2020. Five key items exported to India were mobile phones and components, machinery, computers and electronic hardware, natural rubber, chemicals and coffee, according to information posted on the ministry of external affairs website. The five top items imported from India were animal feed, corn, steel, pharmaceuticals and machinery.
To promote connectivity and boost business linkages, India’s Jet Airways (India) Ltd will be starting direct flights connecting Delhi and Mumbai to Ho Chi Minh City on 5 November, Wadhwa said. Vietnam Airways will begin its operations to India under a code share agreement with Jet Airways early next year, he said.
Bank of India will also be opening a branch in Ho Chi Minh City shortly, he added. Indian companies with a presence in Vietnam include ONGC Videsh Ltd, Essar Exploration and Production Ltd, Nagarjuna Ltd, KCP Industries Ltd, Venkateswara Hatcheries, Philips Carbon and McLeod Russell. NIIT, Aptech and Tata Infotech have opened more than 80 franchised centres across Vietnam. Last year, India’s Tata Power Co. Ltd won an estimated $1.8 billion contract to develop two 660 megawatts coal-fired thermal power plants in south Vietnam against competition from South Korean and Russian companies.
Wadhwa said that Dung would be accompanied on his India visit by a 50-member business delegation that would look at deepening commercial links in areas like the textile sector.
In the area of strategic ties, India, which extended a $100 million credit line to Vietnam during Indian President Mukherjee’s visit last month, will be looking to sell Brahmos supersonic cruise missiles—co-developed with Russia—to Vietnam.
P.K. Chakravorty, adviser to BrahMos Aerospace, the India-Russia joint venture company that manufactures the missile, speaking at the same event, said that Russia had recently given its go ahead to India to sell the missile to Vietnam. Vietnam was on the lookout for surveillance equipment besides modernizing its armed forces—two areas that India could help, Chakravorty said. India had developed its own unmanned aerial vehicles, upgraded T-72 fleet of tanks and had indigenously manufactured artillery guns, he said adding that India could look at selling this to Vietnam that would in turn boost its own fledgling domestic defence manufacturing. India has already overhauled Vietnam’s MiG fighter aircraft fleet and was looking to train the Vietnamese navy’s entire submarine arm, he added.
The three high-level interactions in three months is “unprecedented", said a person close to the developments who did not want to be named. “The Vietnamese are exploring avenues to diversify economic opportunities and they see an opportunity in india," the person said.
In the textile sector, for example, while Vietnam has a vibrant readymade garments’ sector, it has problems sourcing yarn, which it hopes to source from India, the person said. “In the area of tourism, China was a major source of tourist arrivals into Vietnam. But given the tensions, they would like to look at India as a potential source of tourism," the person said.
Tensions between China and Vietnam soared earlier this year after Chinese state energy firm China National Offshore Oil Corp. deployed dozens of ships two weeks ago and towed a $1 billion oil rig 240km off Vietnam’s coast in an area both counties claim. More than 3,000 Chinese nationals were evacuated following days of attacks on Chinese workers and Chinese-owned businesses that left at least two people dead according to the Reuters and AFP news agencies.