Dynamics Of Growing Indo-Vietnam Relationship and the Big Picture

India and Vietnam are emerging and developing countries (EDC) in southern Asia. India has enjoyed warm, cordial diplomatic relations with Vietnam for over fifty years as the world’s largest democracy and one of the fastest-growing economies today. Conversely, Vietnam is also one of the fastest growing regional economies of the 21st century, with GDP predicted to rival developed nations by 2050.

Both modern progressive nations have a history of struggle for independence from colonial rule and mutual admiration between the founding fathers. Gandhi’s India and Ho-Chi Minh’s Vietnam have been helping each other during adversities, showing sensitivity to each other’s concerns and supporting each other’s national development.

Vietnam is an important and reliable partner in India’s Act East Policy and the Indo-Pacific strategy. Here’s a recap of the bilateral relationship in the last 50 years.

India initially had Consulate-level relations with the then North and South Vietnams and later established full diplomatic ties with unified Vietnam on January 7 1972. Since then, there has been no looking back in economic, political and cultural arenas. All these have been very active from both sides.

As a result, both nations have achieved a new dimension in people-to-people contact and more interfacing between the governments and commercial bodies.

Besides, it protects our overall strategic, security, economic and diplomatic interests. We have elevated our bilateral relations from Strategic Partnership in 2007 to a Comprehensive Strategic Partnership in 2016.

2022 – A landmark Year in Indo-Vietnam Bilateral Relation

The year 2022 is the 50th anniversary of our diplomatic journey together. Over these years, we have strengthened our bilateral relations in all areas, including politics, security and defence, science and technology, economy, trade, investment, tourism and cultural exchanges. A quick look at the following hardcore facts on the ground that will establish the essence of the success story in the bilateral relationship.

Given the importance of the relationship, former President of India Shri Ram Nath Kovind paid a State Visit to Vietnam in November 2018. Before that, former President Pranab Mukherjee undertook a State Visit to Vietnam in September 2014. Vice President of India, M. Venkaiah Naidu, also visited Vietnam in May 2019 to deliver a keynote address at the 16th United Nations Day of Vesak celebration. Prime Minister Narendra Modi paid an official visit to Vietnam in September 2016. External Affairs Minister Sushma Swaraj visited Vietnam for the 16th Joint Commission Meeting and the 3rd Indian Ocean Conference from 26-28 August 2018.

Despite travel restrictions due to Covid, Prime Minister Narendra Modi and Prime Minister Mr Nguyen Xuan Phuc opted to hold their first ever India-Vietnam Virtual Summit on December 21 2020, during which both the leaders adopted a historic “Joint Vision for Peace, Prosperity and People” to guide our future bilateral relations. On the side-lines of this Summit, the two Foreign Ministers also inked a Plan of Action for 2021-23 to implement the Joint Vision.

Economy & Business 

(Source – Economic Times)

ONGC Videsh Ltd bags 2-yr extension for a Vietnamese oil block in the South China Sea 

Indian firm ONGC Videsh Ltd has recently been awarded the 7th extension (Valid till June 15, 2023) for oil exploration in the contested waters of the South China Sea by the Vietnam government. OVL has been doing oil exploration and has continued its presence there owing to India’s strategic interest in the South China sea.

Trade and Investment – A top priority in Indo-Vietnam Bilateral Relation 

India is one of the top 8th trading partners for Vietnam and Vietnam is India’s 15th largest trading partner. In 2021, bilateral trade turnover reached $ 13.2 billion for the first time. It is projected to reach the target of $ 15 billion in 2022 set by the two countries leaders.

VietJet to launch 13 new Vietnam-India routes, add Airbus planes 

VietJet – the budget airliner of Vietnam, is planning to introduce 13 new routes between 13 Indian cities and Vietnam. The ambitious plan is expected to be launched and executed in the current calendar year.

The airliner also added more airbus for the Indian operation to cater to the large volume of business and leisure Indian traffic (outbound) for various destinations in Vietnam.

North East GI products were exported to Vietnam by air for the first time. 

North East Farm Sales Promotion (NEFSP), a start-up company from Assam, promoting the Agro-heritage of the north-eastern states, has recently undertaken the export of north East GI products. The broad GI product portfolio includes Assam Orthodox Tea, Large Cardamom, Naga Chilli & Black Rice and Organic Bathing soaps to Hochiminh city, Vietnam, from Guwahati airport’s international air cargo terminal.

Maritime outreach: Shipping route inaugurated between India & Central Vietnam

In a significant move to boost the traffic and maritime trade between India and Vietnam, a new direct sea route was inaugurated recently, paving the way for annual $ 15 billion bilateral trade. The sea route will be linking India’s Kolkata port with central Vietnam, operated by Vietnam Maritime Corporation and is expected to open up new windows of opportunities for the business.

Defence and Security 

(Source Economic times)

India and Vietnam recently developed a joint vision document for a more broad-based bilateral defence cooperation. The combined vision document provides significant defence ties and cooperation expansion in diverse areas by 2030. During Prime Minister Modi’s last visit to Vietnam, indo-Vietnam relations were elevated to a comprehensive strategic partnership in 2016. Since then, Vietnam has become an important partner in India’s Act East policy and the Indo-Pacific vision

Defence Minister Rajnath Singh hands over 12 high-speed guard boats to Vietnam

The initial five boats were manufactured at the L& T Shipyard in India, and the remaining seven were built in Hong Ha shipyard in Vietnam. It was handed over to Vietnam amid the increasing maritime security cooperation between both nations to deal with China’s increasing assertiveness in the South China Sea.

India and Vietnam ink military logistics support pact & vision document to expand defence ties.

As a part of the historic vision document, both the countries have signed a logistics support pact, and the nation’s militaries can use each other’s bases for repair and supply replenishment.

India and Vietnam agree to expand counter-terror & maritime security ties

Both India and Vietnam agreed to cooperate and act on Counter- Terrorism. They also called for initiatives to combat radicalization, terrorism and the production and trafficking of illegal narcotics and arms in the region.

Political

(Source Economic times)

Lok Sabha Speaker visited Vietnam recently to reaffirm strategic and eco partnership.

India’s Lok Sabha speaker recently paid a state visit to Vietnam and met the Prime minister of Vietnam, Mr Pham Minh Chinh and the chairman of the national assembly Mr Vương Đình Huệ, to discuss the current situation in the south China sea.

India and Vietnam support each other in regional and international forums like IPU and exchange experience on parliamentary matters through high-level visits. Om Birla’s visit reaffirms this aspect of relations and practical cooperation between the two leading democracies. The visit underlined India’s reaffirmation of the strength and goodwill of the last 50 years of partnership in strategic, economic and defence cooperation.

Convergence of Views- Adding Dynamics and Creating Chemistry in Indo-Vietnam Bilateral Relationship

India and Vietnam share the same viewpoint regarding the maritime issues in the South China Sea area. Both of them regard this geographic zone as Indo-Pacific, unlike China. Both nations are tackling the rising and aggressive China and facing a lack of support from America for the regional security architecture. Both countries’ governments also want the region’s international sea lanes and overflights to be maintained and international maritime law to be respected.

The ASEAN bloc countries deeply desire to see India emerge as a security provider. Vietnam has become a vital partner for India as it provides it with that leeway into the more prominent South Asian architecture.

Vietnam wants India to play a much more significant role in maintaining and ensuring the region’s peace, stability and prosperity. The country also supports India in playing a more substantial role in multilateral institutions, maintaining and ensuring the multi-polar world order based on international law.

India’s Act East Policy and Vietnam’s Significance as a Partner

As India pursues its ‘Act East Policy, Vietnam remains a vital partner in India’s political and security engagements in the Indo-Pacific region. Both nations share a few strategic concerns like energy security and open and secure sea lines of communication.

India is doing its best to broaden its economic and other strategic interests in the region, while Vietnam is putting all its sincere efforts into strategic autonomy. Both nations are likely to be benefitted from the ongoing strong relationship. All the more, Vietnam enjoys a natural advantage because of its geostrategic location. It enables Vietnam to have a significant influence in the international waters of the South China Sea.

Indo-Vietnam Relationship – The Big Picture Ahead

India is a leading trading partner of Vietnam, while Vietnam is India’s 15th most significant trading partner. The two-way trade between the economies is likely to surpass $15 billion in 2022. India is the priority market for Vietnam, accounting for around 80 per cent of Vietnam’s total trade with other South Asian nations.

Import Export and Mega Infra Projects

Vietnam is pitching for mega projects, including oil and gas exploration projects, medicine park projects, and medical equipment manufacturing projects in the growing Indian economy. Despite very healthy growth in trade, the potentials are yet to be realized and present enormous future potential to both the partners.

Under the Mekong Ganga Cooperation (MGC) scheme, India has been taking up Quick Impact Projects (QIPs), each valued at US$50,000, in different parts of Vietnam to develop community infrastructure. As of date, India has 317 valid projects worth over 1 billion USD in Vietnam, and remarkable progress has been made.

Today Vietnam is exporting a range of products to India. They include mobile phones and components, computers, electronic products and components, chemicals, plastics, rubber, coffee, pepper, and cashew. Indian products imported by Vietnam are iron and steel, textile, fishery, corn, pharmaceutical and pharmaceutical raw materials, and auto spare parts.

The Big Picture

India understands well the true potential of our bilateral relationship and the bright future ahead. Vietnam is a regional power in South East Asia with political stability and high economic growth. Vietnam’s average 7% annual economic growth is remarkable and maintained successfully at 3% during COVID-19, while several nations registered negative growth, including the developed countries. Despite the post-pandemic collapse in global trade, Vietnam could maintain its growth and record trade surplus.

In its national 13th congress, Vietnam’s state authority has set an objective, including national digital transformation, development of a digital-based economy, science and technology development and creation of a more friendly business environment for trade and manufacturing industries. Going forward, these state measures will make the prospect for further growth of trade and commerce between India and Vietnam much brighter in the coming times.

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