INDIA – VIETNAM
India – Vietnam Relationship – Overview
- Political Relationship
- Peace Process: India played a role in the peace process in Vietnam, chairing the International Commission for Supervision and Control (ICSC) under the Geneva Accord of 1954.
- Comprehensive Strategic Partnership: In 2016, the partnership between India and Vietnam was elevated to a Comprehensive Strategic Partnership, emphasizing a stronger alliance.
- Joint Vision Plan: Recently, a Joint Vision document (2021–2023) was established to guide strategic partnership goals, aligning with India’s Indo-Pacific Oceans Initiative (IPOI) and ASEAN’s objectives for regional growth and stability.
- Trade and Economic Cooperation
- Bilateral Trade: From a modest $200 million in 2000, bilateral trade grew to $12.34 billion in 2019–20. Vietnam is India’s 8th largest trading partner in ASEAN.
- Exports and Imports: Vietnam ranks as a major export destination for India, following Singapore in the ASEAN region.
- Investments:
- India in Vietnam: Indian investments are around $1.7 billion, spanning sectors like energy, IT, agro-processing, and coffee manufacturing.
- Vietnam in India: Vietnam has investments totaling $28.55 million in sectors like pharmaceuticals and IT.
- Development Partnerships:
- Revolving Fund under Mekong-Ganga Cooperation: India supports Vietnam’s community infrastructure development through this fund.
- Grant-in-Aid Projects: India has funded projects to support local communities in Vietnam.
- Technical Assistance: India provides technical assistance for preserving Cham monuments in Vietnam.
- Production Hub: Vietnam has emerged as an alternative production hub for Indian businesses.
- Cultural Cooperation
- Cultural Centre: The Swami Vivekananda Indian Cultural Centre in Hanoi fosters cultural understanding and connections between the two countries.
- Institutional Cooperation: Organizations like the Vietnam Institute for Indian and South-West Asian Studies (VIISAS) and various MOUs strengthen academic and cultural ties.
- Civilizational Relations: A bilateral project for an encyclopedia on India-Vietnam cultural relations was launched in 2020.
- Tourism and People-to-People Contacts
- ASEAN-India Year of Tourism: The year 2019 was marked to celebrate tourism ties, promoting people-to-people interactions and fostering mutual understanding.
- Tourism Roadshows: Mission organized two India-Vietnam Tourism Roadshows in 2019, in Hanoi, and in Ho Chi Minh City.
- Simplified visa regime: Vietnam extended e-visa facilities to Indian citizens travelling to Vietnam and India has e-tourist visa arrangement for Vietnamese citizens.
- Connectivity: In October 2019, direct flights between the two countries commenced. It is expected to increase two-way tourism as well as trade and business linkages.
- Capacity Building, Training, and Scholarships
- Tourism and Visa Facilitation:
- Tourism Roadshows: In 2019, India organized roadshows in Hanoi and Ho Chi Minh City to promote tourism.
- Visa Regimes: Vietnam extended e-visa facilities to Indian citizens, and India offers e-tourist visas for Vietnamese travelers. Direct flights between the countries began in October 2019, enhancing tourism, trade, and business links.
- Training Programs: Vietnam benefits from training under India’s Technical and Economic Cooperation (ITEC) program, with over 200 slots annually.
- Scholarships:
- ICCR Scholarships: India offers various scholarships, including Cultural Exchange and Mekong Ganga Cooperation scholarships.
- PhD Fellowships: In 2019, India launched a PhD fellowship program for ASEAN students, including Vietnamese.
- IT Infrastructure: A 2020 grant agreement provided $5 million to establish IT infrastructure in Vietnam’s Army Software Park.
- Indian Community: Approximately 5,000 Indians live in Vietnam, working in sectors like IT, aviation, hotels, and education.
Significance of India-Vietnam Relationship
For India
- Strategic Partner in Act East Policy: Vietnam is essential to India’s Act East policy and its Indo-Pacific and SAGAR (Security and Growth for All in the Region) vision.
- Defense Cooperation: Vietnam seeks India’s support in modernizing its military, including negotiations for BrahMos and Akash missiles.
- Global Diplomacy: Vietnam has backed India’s bid for permanent membership in the UNSC.
- Security and Stability in the Region:
- Containing China: Vietnam’s location makes it strategically significant for countering China’s influence in the South China Sea.
- Energy and Maritime Security: Vietnam offers hydrocarbon reserves and contributes to maritime safety in the Indo-Pacific.
- Global Trade: Vietnam’s location along supply chains makes it a valuable trade partner for India.
- Collaboration Opportunities: India and Vietnam collaborate in areas like IT, pharmaceuticals, oil and gas, and connectivity, further strengthening their partnership.
For Vietnam
- Regional Security: India serves as a balancing force in the region, helping Vietnam resist any single country’s dominance.
- Technology and Capital: Indian companies can infuse much needed capital and technology into the Vietnamese market to bring it to par with its East Asian counterparts.
Challenges in India-Vietnam Relations
- Economic Challenges
- Trade Potential: Aiming for bilateral trade of $15 billion by 2020, the COVID-19 pandemic caused a 9.9% decrease, resulting in $12.3 billion in trade.
- RCEP Withdrawal: India’s non-participation in the Regional Comprehensive Economic Partnership (RCEP) may affect trade relations with Vietnam.
- Chinese Factor: India’s exploration of oil and gas in the South China Sea could impact its relations with China.
- Geographical Distance: The lack of direct geographical contiguity limits tourism, trade, and exchanges.
- Defence and Security Concerns
- QUAD: Vietnam has expressed reservations regarding the QUAD alliance.
- BrahMos Sale: A delay in Vietnam’s response has impacted the potential sale of BrahMos missiles.
- Line of Credit: A $500 million line of credit from India, offered in 2017, remains unutilized.
Way Forward for India-Vietnam Relations
- Expanding Trade Relations: Both countries can explore additional sectors like IT, chemicals, agro-processing, and public-private partnerships.
- Defence Cooperation: Renewing the expired Joint Vision on Defence Cooperation for 2015-2020.
- Cultural Ties: Strengthening shared heritage, including Buddhist and Cham cultural links.
- Timely Project Execution: Ensuring timely delivery of projects to build trust in Indian commitments.