Commentaries
Keywords: India, Vietnam, Strategic Partnership, Defence, Trade, Investment, Indo-Pacific
Date:05th August, 2024
The recent three-day state visit of Vietnam’s Prime Minister Pham Minh Chinh to New Delhi marks a crucial milestone in the diplomatic relationship between India and Vietnam. The high-level delegation that included several ministers and business leaders of Prime Minister Chinh highlighted the essence of the deepening bilateral ties between the two countries.
Vietnam is one of the key partners of New Delhi in its efforts to achieve the strategic objectives under the Act East Policy. It is pertinent to note that India is one of the three countries that enjoy a comprehensive strategic partnership (CSP) with Vietnam. The strategic partnership aims to enhance connectivity, economic, and military cooperation between the two countries in the Indo-Pacific region.
During the visit, a plan of action to implement the comprehensive strategic partnership 2024-2028 was approved. The shared vision for the Indo-Pacific region is one of the critical areas of convergence between India and Vietnam. During the meeting, leaders of both countries reiterated their commitment to a rule-based, free, and open Indo-Pacific. Both India and Vietnam view maritime security as one of their core areas of partnership.
During Prime Minister Chinh’s visit, the two countries have decided to further enhance their defence cooperation. To strengthen Vietnam’s naval capabilities, India has extended a $300 million credit line to boost maritime security. Meanwhile, both countries have also agreed to cooperate in areas such as fighting terrorism and cyber security which reflects a comprehensive approach to bilateral security ties. The Army Tech Park built with Indian assistance ($5 million) in Nha Trang, Vietnam was also inaugurated virtually by both leaders.
For the past two decades, Vietnam has used its economic linkages with China as a tool to bring prosperity to the country. At the same time, Vietnam is one of the claimant states in the South China Sea (SCS) dispute that has been facing the heat of Chinese aggression in recent years. Hanoi prefers not to overtly antagonize China, but instead focus on economic growth, while improving its defence capabilities. It is interesting to note that India’s position on China is also not very different from Vietnam.
Both New Delhi and Hanoi see each other as natural partners in the Indo-Pacific region. New Delhi and Hanoi have recognised that without robust economic linkages through active participation in global value chains (GVCs), the traditional military ties alone are not enough. Hence, Prime Minister Chinh and Prime Minister Modi have made efforts to transform the ties between the two countries to all spectrums of life including trade, culture, production, research, and development, apart from traditional military ties.
Even as maritime security occupies top priority in Indo-Vietnamese ties, the two countries are building a relationship towards a truly comprehensive strategic partnership. The focus on economic diplomacy, fostering mutual investments, and removal of trade barriers signify a balanced approach that complements existing robust military ties.
Trade and economic aspects of the relationship between India and Vietnam have been receiving greater attention in the last decade, especially in the post-covid era. The $14.4 billion bilateral trade between the two countries in 2022 includes $6.7 billion and $7. 44 billion exports from India and Vietnam respectively. During Prime Minister Chinh’s visit, both sides highlighted the need to increase their bilateral trade to $20 billion.
At the Vietnam-India Business Forum, Prime Minister Chinh met leading Indian industrialists and invited Indian businesses to invest in transportation, digital, energy, and climate infrastructure in Vietnam. It is worth noting that Indian companies such as Adani Group have been exploring opportunities in the infrastructure and renewable energy sectors in Vietnam. Hanoi is also keen to utilise the robust pharma industry of India to build a pharma ecosystem in Vietnam. Meanwhile, Vinfast (Vietnam’s automaker) has started to build a car assembly and production unit in the southern Indian state of Tamil Nadu.
Prime Minister Chinh also insisted on exploring a free trade area (FTA) indicating a strategic move towards deeper economic integration. The two countries have signed MoUs on a wide range of areas during the visit including maritime security, digital connectivity, customs, capacity building, agriculture, and credit line agreements. Importantly, the two sides also discussed the need for the review and early conclusion of the ASEAN-India Trade in Goods Agreement.
Similarly, the collaboration between Vietnam Academy of Agricultural Sciences in Hanoi and Central Agricultural University in Imphal was also agreed during the meeting. Furthermore, decisions on building digital payment connectivity between the central banks of the two countries were made, highlighting the commitment on both sides to effectively harness the benefits of technology for deeper economic integration.
Strengthening tourism and cultural ties between the two countries were also emphasised during the visit. Promoting Nalanda University to Vietnamese youth and Prime Minister Modi’s invitation to Vietnamese to the Buddhist circuit in India were some of the ideas discussed to boost people-to-people ties between the two countries.
India and Vietnam’s strategic partnership has been evolving into a multidimensional partnership that nurtures defence, economic, and cultural ties. In line with the roadmap as outlined in the new Plan of Action for 2024-2028, both countries are set to explore cooperation across sectors at an accelerated pace.
Against the backdrop of increasing Chinese assertiveness and geopolitical competition between the great powers in the region, the Indo-Vietnam strategic partnership is expected to play a significant role in building a stable and prosperous Indo-Pacific. In this context, the recent state visit of Prime Minister Chinh and his meeting with Prime Minister Modi was another step towards utilising the full potential of the Indo-Vietnam partnership.
Prasanna Kumar is a Senior Research and Program Associate at Asian Confluence. He is pursuing his PhD from O.P Jindal Global University.
Disclaimer: The views expressed above and the information available are those of the author/s and can therefore in no way be taken to reflect the position of Asian Confluence
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