Relations between Vietnam and India
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India and Vietnam recently unveiled a new strategy to deepen their bilateral "comprehensive strategic partnership" over the following five years during a bilateral summit in New Delhi.
The agreement emphasizes initiatives to deepen the two nations' connection, with a focus on customs capacity building, radio and television networks, agriculture, law and justice, and other areas.
Which aspects of the bilateral meeting are the most important?
New Course of Action:
A new action plan aimed at strengthening the two countries' "comprehensive strategic partnership" over the next five years has been revealed by Vietnam and India.
In 2016, the relationship between Vietnam and India was upgraded to a "Comprehensive Strategic Partnership." The comprehensive strategic collaboration will be implemented through a phased plan of action that runs from 2024 to 2028.
This includes efforts to create digital payment connectivity and quicken the assessment of the ASEAN-India Trade in Goods Agreement, as declared during the bilateral summit.
Agreements & Financial Support:
Six Memorandums of Understanding (MoUs) covering agricultural research, customs capacity building, law and justice, media, and traditional medicines were signed by the two nations during the visit.
Additionally, India gave Vietnam two credit lines for a combined $300 million USD.
Trade and Electronic Fund Transfers:
Noting an 85% increase in two-way commerce and enhanced defense and security coordination, India emphasized the considerable expansion in trade and cooperation in several industries over the past ten years.
This expansion is anticipated to be facilitated by the ASEAN-India Trade in Goods Agreement review coming to an early conclusion.
Furthermore, Vietnam suggested raising the goal for bilateral trade from USD 14.8 billion to USD 20 billion.
Agreements & Financial Support:
Six Memorandums of Understanding (MoUs) covering agricultural research, customs capacity building, law and justice, media, and traditional medicines were signed by the two nations during the visit.
Additionally, India gave Vietnam two credit lines worth a combined USD 3.
The establishment of digital payment connectivity between the two countries will improve cross-border commerce by enabling quick payments and QR codes.
Emphasis on Security and Defense:
Along with enhancing defense and security cooperation, the leaders talked on the establishment of a new Army Software Park in Nayachang, which is being supported by an Indian grant.
Additionally, cybersecurity and counterterrorism will be areas of mutual collaboration.
Temple Conservation: Both governments signed a letter of intent to restore and preserve several historic Shiva temples in the province of Quang Nam's My Son.
The Indo-Pacific Perspective:
Vietnam has been instrumental in helping India implement its Act East Policy, and both countries have reaffirmed their commitment to an Indo-Pacific region that is free, open, and governed by laws.
Insinuating that China's actions in the area are a cause for concern, India restated its preference for development over expansionism.
What is the current state of relations between Vietnam and India?
Diplomatic and Historical Relations:
During their respective countries' independence movements, President Ho Chi Minh and Mahatma Gandhi, the fathers of their respective nations, exchanged notes.
India and Vietnam first established diplomatic relations in 1972. In 2007, these ties were upgraded to a strategic partnership, which was then further transformed into a Comprehensive Strategic Partnership in 2016.
Our partnership is currently governed by the "Joint Vision for Peace, Prosperity, and People," which was accepted in 2020.
Both countries celebrated their 50th anniversary of diplomatic relations in 2022 and are still working to expand their wide-ranging collaboration.
Economic cooperation:
Indian businesses are present in Vietnam, including ONGC Videsh Limited, Bharat Electronics Limited, Hindustan Computers Limited, and Bank of India.
India and Vietnam's trade reached USD 14.82 billion between April 2023 and March 2024, according to trade statistics.
Vietnam received USD 5.47 billion worth of Indian exports, compared to USD 9.35 billion in imports.
A preferential trading regime is offered via the 2009-finalized ASEAN-India trading in Goods Agreement, which is presently being reviewed.
Vietnam is the destination for India's exports of minerals, electronics, textiles, plastics, chemicals, medicines, and technical items.
Vietnam is a major importer of electronics, computers, cell phones, machinery, steel, chemicals, clothing, footwear, and timber goods.
Approximately USD 2 billion in investments have been made by Indians in Vietnam in a variety of industries, including energy, mining, agro-processing, IT, auto parts, pharmaceuticals, hospitality, and infrastructure.
As per the Foreign Investment Agency of Vietnam, India had 53 new projects worth USD 131.90 million between January and December of 2023.
On the other hand, Vietnam has invested about USD 28.55 million in India, mostly in the areas of consumer goods, electronics, building, information technology, and medicines.
Development Collaboration:
Developmental Partnership within the Mekong-Ganga Cooperation (MGC) framework: Ten more projects are currently in progress, and India has completed about 45 Quick Impact Projects spanning over 35 Vietnamese provinces.
MGC was founded in 2000 and focuses on tourism, culture, education, IT, telecommunications, and transportation. Its member countries include Cambodia, Laos, Myanmar, Thailand, Vietnam, and India.
India has additionally contributed to the preservation of the Quang Nam Province's UNESCO World Heritage site, "My Son," with the Archaeological Survey of India concluding the restoration of multiple temples there in 2022.
Defense and Security Links:
A 2009 Memorandum of Understanding on Defense Cooperation and a 2015 Joint Vision on Defense Cooperation have strengthened India and Vietnam's strong defense and security ties.
In 2022, they concluded a "Joint Vision Statement on India-Vietnam Defence Partnership towards 2030" along with a "Memorandum of Understanding on Mutual Logistics Support."
In 2023, Vietnam got the INS Kirpan, a missile corvette constructed domestically.
Staff meetings, drills, instruction, and exchanges—like the military exercise VINBAX-2023—are all examples of bilateral military cooperation. Additionally, in February 2024, a Vietnamese naval ship took part in the MILAN international maritime exercise in India.
Cultural Interaction:
MoUs encourage academic and cultural connections between Vietnamese and Indian institutions.
Cultural links are strengthened by occasions like Ho Chi Minh City's Northeast India Festival. Travels to India by Vietnamese Buddhist scholars and pilgrims are indicative of ancient Buddhist ties.
Vietnam is home to a large number of Indian yoga instructors, who have helped to popularize the practice.
Through a variety of initiatives and events, the Swami Vivekananda Indian Cultural Center in Hanoi significantly contributes to the advancement of Indian culture and the bolstering of bilateral connections.
What Problems Do India-Vietnam Relations Face?
Market Access and Trade Imbalances:
Vietnam's exports to India are less than its imports, despite a notable increase in trade, leaving India with an adverse trade balance.
One of the biggest challenges still facing both countries is resolving these trade deficits and expanding market access for their products.
Geopolitical Tensions in the Indo-Pacific:
India-Vietnam ties are challenged by the strategic rivalry in the Indo-Pacific area, notably with regard to China's aggression in the South China Sea.
Both nations are concerned about freedom of navigation and regional security, but managing these geopolitical issues calls for cautious diplomacy.
Infrastructure and Logistical Barriers:
Infrastructure and logistical barriers might occasionally impede the growth of bilateral commerce and investment.
Inadequate port infrastructure, poor connection, and ineffective logistics can all impede the free movement of products and services between the two nations.
Difficulties in Security and Defense Cooperation:
Although defense cooperation between Vietnam and India has been reinforced, there are still issues with technology transfer, defense acquisition, and strategic alignment.
Managing these intricacies while negotiating regional security dynamics is necessary to ensure efficient military and security partnership.
The Way Ahead
Comprehensive Strategic Partnership:
By increasing cooperation in important sectors including defense, security, and regional stability, both countries should keep strengthening the current Comprehensive Strategic Partnership.
Defense and Security:
Boost cooperative training initiatives, technology transfers, and joint exercises to fortify defense relations.
Examine opportunities for additional collaboration in fields like cyber defense, maritime security, and counterterrorism.
Trade Growth:
By removing trade barriers, expanding export-import product diversification, and strengthening collaboration in industries including technology, energy, and pharmaceuticals, aim to reach the suggested bilateral trade target of $20 billion.
In order to promote more seamless trade operations, expedite the review of the ASEAN-India Trade in Goods Agreement.
Investment Opportunities:
Find and promote high-impact infrastructure, energy, and technology projects to encourage bilateral investments.
Mekong-Ganga Cooperation:
Keep up the support and growth of the Mekong-Ganga Cooperation framework by concentrating on significant projects that tackle issues related to regional development.
Indo-Pacific Vision:
Work together to keep the Indo-Pacific area open, free, and governed by laws. Collaborate to tackle local issues and uphold ASEAN's pivotal function in regional safety and economic unification.
Technology Transfer:
Encourage joint ventures and technology transfer in cutting-edge fields like digital infrastructure, renewable energy, and artificial intelligence.
