BackVietnam and India look to deepen economic cooperation
Representatives from both countries set their sights squarely on achieving $15 billion in bilateral trade this year
PremiumVietnam came calling for investments to India on Monday as representatives of the country’s Khanh Hoa Province visited New Delhi. Speaking at an event organised by the Indian Chambers of Commerce and the Foreign Ministries of India and Vietnam, representatives from both countries set their sights squarely on achieving USD 15 billion in bilateral trade this year.
Vietnam’s Deputy Chief of Mission in India, Do Thanh Hai, pointed out that the visit marked one of the first visits by a provincial delegation from Vietnam seeking increased investment and trade ties.
Bilateral trade volumes between both countries have registered impressive growth in recent years. According to the Indian Embassy in Hanoi, trade rose by 27% and crossed USD 14 billion during the last financial year. India’s trade volumes with Vietnam are beginning to rival those of established partners like Indonesia and Malaysia.
Vishwas Vidhu Sapkal, Joint Secretary (South) in the Ministry of External Affairs, was optimistic about the future of trade ties. The future of economic ties, he felt, lay in building reliable, resilient supply chains, facilitating long term investments and greater market access while also working to upgrade the regional trade structure. Mr. Sapkal pointed to the upcoming talks on the revision of the India-ASEAN trade in goods agreement as a particular opportunity to expand bilateral trade. In the decade since that agreement was signed, Indo-Vietnamese bilateral trade grew at a staggering Compounded Annual Growth Rate (CAGR) of 19.11%. Only India’s rather miniscule trade with Laos grew faster during the same period.
Mr. Sapkal pointed to agriculture, energy, pharmaceuticals among industries as India’s particular strengths in the trade relationship while. Vietnam’s strengths, by contrast, lay in chemicals and construction.
Speakers at the event pointed to prospects for the future. India’s reputation as a destination for medical tourism and ability in human resource development in fields like information technology would be particularly helpful to Vietnam. The Indian Technical and Economic Cooperation (ITEC), an initiative by the Indian government, has played a key role in this regard in Southeast Asia.
Tourism was cited as another possible avenue for growth in economic activity. In 2019, approximately 170,000 Indians visited Vietnam.
According to the ministry of External Affairs, “India’s investments in Vietnam are estimated at around US$ 1.9 billion including investments routed through third countries." These investments are to be found in “ energy, mineral exploration, agro-processing, sugar, tea, coffee
manufacturing, agro-chemicals, IT and auto components." By contrast, an MEA briefing note added, “Vietnam has six investment projects in India with a total estimated investment of US$ 28.55 million, primarily in the areas of pharmaceuticals, information technology, chemicals and building material."
The visit of the provincial delegation from Vietnam comes in the background of an increasingly tighter strategic embrace between New Delhi and Hanoi. The rise of China has unnerved both powers even as they have begun to come into their own as formidable economic powers. The bilateral relationship was upgraded to the level of a “Comprehensive Strategic Partnership" in 2016 and has since gone from strength to strength. India has furnished Vietnam with patrol boats, defence lines of credit and technical assistance in defence even as both sides have carry out joint exercises.
As 2022 marks 50 years of bilateral ties between India and Vietnam, numerous speakers pointed to the latter as a key partner in India’s Act East policy.
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