India-Vietnam Strategic Partnership Goes Beyond Headlines

That the all-powerful To Lam, who is also General Secretary of the Central Committee of the Communist Party of Vietnam, chose to visit India within the first month of being elected as President displays the strength of the partnership. 

New Delhi and Hanoi have decided to enhance trade in a balanced and mutually beneficial manner and agreed on a new trade goal of US$ 25 billion by 2030. Both sides will facilitate market access, including those for agricultural products.  

During the visit, both sides agreed to enhance the supply chains in sectors of mutual interest. Vietnam has affirmed its commitments to diversify its supply sources and to import more products from India to serve its domestic production and export needs. Delhi and Hanoi have agreed to explore ways for a more conducive regulatory environment to facilitate ease of doing business for the companies of both countries, including in standards compliance certification. 

Collaboration In Finance, Trade  

Greater two-way investments must be encouraged to further strengthen India-Vietnam economic ties, especially in the fields of high-technology, transport, manufacturing, logistics, renewable energy, smart agriculture, electric vehicles and information technology, healthcare, agriculture and agro-processing, aquaculture, tourism and hospitality, among others. There has been a decision to strengthen the linkages between the two countries’ startup ecosystems and encourage substantive cooperation among innovation centres. 

It has been agreed to strengthen cooperation in these areas, through enhanced sharing of experiences in developing enabling regulations and policies to support their growth and support businesses, especially Micro, Small, and Medium Enterprises (MSMEs) to participate in e-commerce to integrate deeply and sustainably in regional and global value chains.

Energy sector cooperation will get a boost by enhancing exploration and production activities, including the development of new wells where Indian companies are interested in participating, in accordance with Vietnamese law and international law, particularly the 1982 United Nations Convention on the Law of the Sea (UNCLOS). 

An MoU was signed between the Reserve Bank of India and the State Bank of Vietnam on financial innovation and digital payments. They agreed to promote linkages for retail payment platforms via QR Codes that would facilitate tourism and businesses on both sides. 

The two sides must now facilitate greater collaboration and partnership in critical and emerging technology areas such as Digital Public Infrastructure, 6G, Artificial Intelligence, space and nuclear technology, marine sciences, biotechnology, pharmaceuticals, advanced materials and critical minerals. Cooperation will focus on practical initiatives such as joint research, R&D centres, and product development.

While what grabs media headlines is the defence partnership and the South China Sea, it is the trade partnership that has been steadily growing. From a meagre US$200 million in the year 2000, bilateral trade grew to US$ 14.89 billion in 2024. India’s investments in Vietnam are estimated at around US$2 billion, including investments routed through third countries. 

From January-December 2024, according to the Foreign Investment Agency of Vietnam, India has 48 fresh investment projects valued at US$86.69 million. As of 2024, Vietnam has invested US$12.69 million in the areas of pharmaceuticals, information technology, chemicals and building materials. VinFast is setting up an electric vehicle manufacturing plant at SIPCOT Industrial Estate in Thoothukudi, Tamil Nadu, with a total initial investment of US$500 million which is at an advanced stage of completion. 

Defence Industry Partnership

The two countries have agreed to further strengthen cooperation and enhance engagements in both traditional and emerging areas of defence cooperation, including defence policy dialogue, joint exercises, staff talks, joint research and co-production of new defence technologies, enhanced port calls by Naval vessels and Air Force aircraft, peacekeeping activities, information sharing, hydrography, defence exhibitions, capacity building, defence industrial cooperation, maritime security, maritime safety, and search and rescue operations based on mutual interest and priorities of the two countries, which will also contribute to greater stability in the wider Indo-Pacific region. It was decided to enhance defence systems procurement between the two countries with a focus on state-of-the-art BrahMos missiles. 

Over the years, the Defence Lines of Credit extended by India for Vietnam have contributed to strengthening Vietnam’s defence capabilities and advancing bilateral defence cooperation. Security cooperation between the two sides have received a further boost to realise shared objectives in the fields of information sharing, cybersecurity, counterterrorism and combating high-tech crime, transnational crime, money laundering and online scams. 

It was agreed to enhance the exchange of experience and expand cooperation in the security domain, including promoting cooperation in training and capacity building for law enforcement officers, support for professional training, foreign language training, cybersecurity incident response skills, and UN Peacekeeping. 

(The writer is a commentator on geopolitics. Views expressed are personal.)