Dr Bharti Chhibber
India and Vietnam, the two Asian countries share long cultural and historical connections in Buddhism and the freedom struggle from colonialism. Cham civilization in Vietnam is also a symbol of our traditional ties. Formally, diplomatic relations were established between the two countries in 1972. Over the period of time, our friendship is going from strength to strength, from Strategic Partnership in 2007 to Comprehensive Strategic Partnership in 2016 during the visit of Indian Prime Minister Narendra Modi to Vietnam. Vietnam is a gateway to India’s Act East Policy and plays an important role in India’s Indo-Pacific strategy. A Joint Vision for Peace, Prosperity and People was adopted during the Virtual Summit in December 2020 by Indian Prime Minister Narendra Modi and Vietnam Prime Minister Nguyen Xuan Phuc.
There have been many high-level bilateral visits between the two countries emphasising the multi-faceted nature of our association with convergences in economic, diplomatic, politico-strategic and security dimensions. Chairman of the National Assembly of Vietnam, Vuong Dinh Hue visited India in 2021. Similarly, Rajnath Singh, Defence Minister of India visited Vietnam in June 2022 followed by the visit of Do Quoc Hung, Deputy Director General of the Ministry of Industry and Trade, Vietnam to India in July 2022. Last year Shri Rajkumar Ranjan Singh, Minister of State for External Affairs also visited Vietnam for the Annual Horasis-India Meeting.
As we commemorated 50 years of our diplomatic journey in 2022, bilateral trade between India and Vietnam reached US$ 14.14 billion from just US$ 200 million in 2000. In 2021-22, Vietnam was India’s fourth largest trading partner within ASEAN, following Singapore, Indonesia and Malaysia. Indian exports to Vietnam include iron & steel products, textile materials, fishery, and pharmaceuticals, and Vietnam exports to India include computers, chemicals, coffee, electronic products, mobile phones, plastics and rubber.
Similarly, at present, India’s investments in Vietnam are approximately US$ 1.9 billion in the fields of agro-processing, agro-chemicals, coffee, energy, IT, manufacturing, mineral exploration, sugar and tea. Vietnam has investments of about US$ 28.55 million in India in building materials, chemicals, information technology and pharmaceuticals. Many Indian companies in different fields are already engaged in Vietnam including Bank of India, Godrej, HC, ONGC Videsh, Tata Coffee, Tech Mahindra, and Wipro.
Though our bilateral trade and investments have increased over the years, there is vast potential to expand it further. Vietnam wants to diversify its trade and India’s huge, growing market provides an apt opportunity. India also sees Vietnam as an important regional actor in South East Asia, politically secure and economically vibrant with an average of seven per cent annual economic growth. It maintained three per cent economic growth even during the pandemic crisis. In addition, Vietnam is now a favourable alternative for states like Japan keen on moving their enterprises from China.
The economic association can be augmented in the fields of medical tourism and oil & gas paving the way for an alternative energy supply chain. Vietnam is also looking for further Indian projects in oil and gas exploration and medical equipment manufacturing. In contemporary times, building reliable supply chains, capacity building, human resource development in information technology, and sustainable growth requires a coordinated outlook between India and Vietnam to maximise mutual benefits in the economic realm. An integrated supply chain mechanism by India and Vietnam in textile, outsourcing and manufacturing also call for better infrastructure development like ports and roadways with connectivity remaining central to enhanced cooperative ventures. It is high time that a free trade agreement materialises between India and Vietnam which will not only add to bilateral trade in goods and services, reinforce FDI, and value chain links but would also be expanding the network in the Indo-Pacific.
The domain of a digital-based economy further offers India and Vietnam an avenue to bolster their cooperation. At its 13th National Congress Vietnam prioritised national digital transformation, a digital-based economy, the development of science & technology, and a productive setting for business and manufacturing initiatives. India is already facilitating capability enhancement through ITEC and e-ITEC plans with Vietnam. Investment capital commitment of $ 12 billion in the International Pharmaceutical Park project in Vietnam’s Hai Duong by Indian businesses will give a boost to bilateral economic relations.
Vietnam has also supported a greater role for India in multilateral fora and in the stability and growth of the region. Vietnam perceives India as a strong partner in modifying its strategic options. India has also supported Vietnam’s stand on resolving conflicts in the South China Sea in consonance with international law. India has emphasized that any Code of Conduct in the South China Sea should be guided by the UN convention and negotiations should respect the legitimate rights and interests of all the countries towards rules-based order. India has oil exploration programs with PetroVietnam and is supporting oil and gas exploration with Vietnam in spite of provocative Chinese actions in Vietnamese waters.
India is also working with Vietnam in the defence sector to accelerate Vietnam’s military capabilities by extending defence Lines of Credit to Vietnam. Bilateral defence initiatives include the construction of 12 high-speed guard boats for the Vietnam Border Guard Command and joint military exercises. In August 2021 Indian and Vietnamese navies took part in a bilateral exercise in the South China Sea. A ‘Joint Vision Statement on India-Vietnam Defence Partnership towards 2030’ was signed during India’s Defence Minister, Rajnath Singh’s visit to Vietnam in 2022. India and Vietnam also inked a Memorandum of Understanding on reciprocal logistics assistance to authorise the militaries of the two countries to access each other’s bases for repair and replenishment of supplies.
Tourism is another area which is witnessing higher growth with Vietnam emerging as one of the favourite destinations for a large number of Indian tourists. Vietnam has launched many direct flights between its vibrant tourist places and Indian cities for ease of travel.
Hence, the growing bonhomie between India and Vietnam accentuates the confluence between the two countries in varied areas of strategic, political, defence, economic, digitalisation, information technology and people-to-people diplomacy. With their common vision of peace, prosperity, and security, India and Vietnam are committed to robust engagements bilaterally and multilaterally in the South China Sea, Indo-Pacific region and beyond. The supply chain vulnerability perceived in the last few years is an opportunity for India and Vietnam to deepen their collaboration in the commercial sector. Both states should further promote infrastructure and connectivity linkages to facilitate their dynamic association. A proactive approach to realize the full potential of India-Vietnam relations will take it forward in the next five years as a Comprehensive Strategic Partnership towards 2030.
(The author is a foreign policy & environment expert and teaches international relations at the University of Delhi.)
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