INDIA – VIETNAM RELATIONS
India and Vietnam are celebrating 50th anniversary of their diplomatic relations. The two countries are a natural outcome of a growing convergence of their strategic and economic interests, and their common vision for peace, prosperity and their people.
TRADE AND ECONOMIC RELATIONS
- During FY 2020–2021, bilateral trade between India & Vietnam reached US$11 billion, with Indian exports to Vietnam amounting to US$5 billion and Indian imports from Vietnam at US$6 billion.
- India’s trade deficit with Vietnam reduced from US$ 2.2 billion during FY 1920 to US$ 1.1 billion in FY 20- 21.
- In FY 2020-21, for India, Vietnam was 15th largest trading partner globally and 4th largest within ASEAN, following Singapore, Indonesia and Malaysia.
INVESTMENTS
- India’s investments in Vietnam are estimated at around US$ 1.9 billion including investments routed through third countries
- As of 2020, Vietnam has 6 investment projects in India with total estimated investment of US$ 28.55 million.
DEVELOPMENT PARTNERSHIP
- India has aided Vietnam within ASEAN framework.
- Under Mekong Ganga Cooperation (MGC) framework, India has been taking up Quick Impact Projects, each valued at US$ 50,000, in different provinces of Vietnam for development of community infrastructure.
STRATEGIC RELATIONS
- As an extension of its Act East policy, Vietnam has become a valuable partner in India’s political and security engagements in the Indo-Pacific region.
- The two countries are working to address shared strategic concerns (such as energy security and open and secure sea lines of communication) and make policy choices without undue external interference.
- Both India & Vietnam face territorial disputes with and shared apprehensions about their common neighbour, China.
- Vietnam is of great strategic importance because its position enables it to control South China Sea.
MARITIME ENGAGEMENT BETWEEN INDIA-VIETNAM
- India’s aspiration to counter an assertive China by strengthening Vietnam’s military power.
- With India’s increasing trade with East and Southeast Asia, India has begun to recognise importance of its sea lines of communication beyond its geographical proximity; South China Sea occupies a significant geostrategic and geo-economic position, resulting in India’s renewed interests in South China Sea.
- India desires to intensify its presence to track potential developments in maritime domain that could affect its national interests.
- Indian Navy underlines importance of a forward maritime presence and naval partnership that would be critical to deter potential adversaries.
- India’s maritime strategic interests in the region are well established, including the fact that almost 55% of India’s trade with Indo-Pacific region passes through South China Sea.
- India sees an open & stable maritime common being essential to international trade and prosperity; therefore, it has an interest in protecting sea lanes.
STRATEGIC COOPERATION
- Both signed Joint Vision for Defence Cooperation and a MoU on mutual logistics support in 2022.
- A U.S.$100 million Defence Line of Credit has been implemented, India has announced early finalisation of another U.S.$500 million Defence Line of Credit to enhance Vietnam’s defence capability.
- India is providing comprehensive underwater combat operation training to Vietnamese sailors at INS Satavahana in Visakhapatnam
- Vietnam is also exploring the possibility of acquiring Indian-manufactured surveillance equipment such as unmanned aerial vehicles.
COOPERATION ON REGIONAL FORUMS
- Both have found mutual convergences on cooperation in Indo-Pacific region and are synergising their efforts to work in bilateral, sub-regional and multilateral frameworks, such as Indian Ocean Rim Association (IORA), BIMSTEC, Mekong-Ganga Cooperation, ADMM-Plus or ASEAN Defence Ministers Meeting-Plus.
- Both countries are also looking at collaboration around the seven pillars of Indo-Pacific Oceans Initiative (IPOI).
CHALLENGES
- India is one of the three countries (with Russia and China) with which Vietnam has a Comprehensive Strategic Partnership.
- Cultural attitudes place India lower in the hierarchy than Vietnam’s most important partners.
- Vietnamese attitude towards China is to cooperate and struggle at the same time.
- Vietnam did not take any stand in the India-China LAC conflict, even when Vietnam wants India’s cooperation on countering China in the South China sea.
- Indian investments in Vietnam lag not just China but also Japan, South Korea, and Singapore.
