Vietnam, A Strategic Pillar Of India’s Act East

relationship has a historical foundation as well as growing salience in the modern era in the backdrop of China’s expanding presence in South East Asia. Unlike the Philippines, which is engaged in open confrontation with China, Hanoi has a nuanced position. Yet, for centuries Vietnam has been acutely aware of China’s goal in the region and stands as a bulwark against Beijing’s aggressive posture.

Strategic autonomy is the bedrock of the foreign policy of both India and Vietnam, even as both maintain a close defence partnership with Russia. Vietnam has pursued a multi-vector foreign policy which has enabled investments in the country, allowing its economy to grow, especially as a manufacturing hub.  

Next In Defence Cooperation

Defence and security cooperation is a key pillar of the Enhanced Comprehensive Strategic Partnership between India and Vietnam. 

Doval not only met President To Lam, who is also General Secretary of the Communist Party of Vietnam, but also Deputy Prime Minister and Minister of National Defence General Phan Văn Giang in Hanoi to review ongoing military cooperation, intelligence sharing, and cybersecurity.

During the November 1-2 visit, Vietnam also proposed a classified information exchange and protection agreement with India. Following the 19th India-Vietnam Joint Commission Meeting in September 2026, both nations prioritised the joint production of military hardware and co-production of Indian defence items. 

On 19 October, leading Indian defence companies and 32 Vietnamese entities, including end users, research institutions, and procurement agencies, held a brainstorming session to explore the defence industry partnership. 

The interaction provided a valuable platform to explore opportunities for greater defence industrial cooperation, technology collaboration, and co-production between India and Vietnam. As both India and Vietnam are familiar and well adapted to Soviet and Russian origin defence equipment, the partnership gets all the more smooth.

India’s US$ 500 million defence line of credit is being actively utilised.

Projects include upgrading Vietnamese naval ships, supplying submarine batteries, and manufacturing patrol/offshore vessels. Past milestones include India gifting the missile corvette INS Kirpan in 2023 and delivering 12 high-speed guard boats built by Larsen & Toubro.

Vietnam is slated to acquire India’s BrahMos cruise missile system, joining the Philippines and Indonesia.  

During Defence Minister Rajnath Singh's visit in May 2026, the two nations exchanged MoUs focusing on next-generation warfare, including artificial intelligence (AI) and quantum technology (such as establishing an AI lab at Vietnam's Telecommunications University) alongside a language lab at the Air Force Officers College.

The defence cooperation is guided by the 2009 Memorandum of Understanding (MoU) on Defence Cooperation and the 2015 Joint Vision on Defence Cooperation. In June 2022, the two sides also agreed upon a Joint Vision Statement on India-Vietnam Defence Partnership towards 2030 and signed an MoU on Mutual Logistics Support.

Trade Partnership

Vietnam is not just a popular tourist destination but a rising Asian economy. The transformation of the country - ruled by a pragmatic Communist Party, and despite war in the 1960s and 1970s - is nothing but a miracle.

India and Vietnam have long-standing trade and economic relations, which have steadily grown over a period of time. Total merchandise trade between India and Vietnam was US$ 18.28 billion in 2025-2026, an increase of 15.98% year-on-year.

India’s exports to Vietnam amounted to US$ 6,665.86 million, while exports by Vietnam to India stood at US$ 11,615.23 billion. Trade was in favour of Vietnam to the tune of US$ 4,949.37 million.

India is Vietnam’s 9th largest trading partner, 7th largest export market and 10th largest import source. For India, Vietnam was the 19th largest trading partner, 19th largest export destination, and 19th largest import source globally in FY2025-26. Vietnam is the 5th largest trading partner of India among ASEAN countries after Singapore, Indonesia, Thailand, and Malaysia. Both countries have now agreed to explore substantive and practical measures to achieve the trade target of US$ 25 billion by 2030.

Investing In Each Other

India’s investments in Vietnam are growing and are currently estimated at around US$ 2 billion, including investments routed through third countries. From January to December 2025, India had 53 fresh projects with a total registered capital of US$ 3.19 million.

As of 2025, India has 473 FDI projects with a total investment of US$ 1,117.53 million, ranking 26 among the countries and territories investing in Vietnam. The major sectors of investment are energy, mineral exploration, agro-processing, sugar, tea, coffee manufacturing, agro-chemicals, IT, and auto components.

Vietnam has invested US$ 87.33 million in India primarily in the areas of automobile, air transport, pharmaceuticals, information technology, chemicals, and building materials.

Today, Vietnamese electric vehicle maker VinFast has scaled up its presence in India rapidly since breaking ground on its manufacturing plant in Tamil Nadu. VinFast built an integrated electric vehicle manufacturing facility in Thoothukudi (Tuticorin), Tamil Nadu, operationalised within 17 months of breaking ground in February 2024. Few would have imagined that a Vietnam automaker would go global and set up a manufacturing unit in India.

India has been a reliable and trusted development partner of Vietnam. Bilateral cooperation has resulted in positive contributions in training, capacity building, socio-economic and skill development.

Role In ASEAN

Vietnam is also a partner country within the ASEAN framework and the Mekong Ganga Cooperation mechanism, such as training and Quick Impact Projects (QIPs) for local communities across Vietnam. These QIPs, carried out in several provinces of Vietnam since 2017, have positively impacted the lives of the citizens at the grassroots.

Vietnam's economy is one of the fastest-growing and most export-oriented manufacturing powerhouses in South East Asia. Acting as a primary alternative for global supply chain diversification away from China, Vietnam hosts major multinational investments from companies like Samsung, Intel, and Apple.

Vietnam’s average economic output per person is set to overtake Indonesia’s. Its growth is pushed by export manufacturing, foreign investment in electronics, and other higher-value industries, as well as a huge public infrastructure push.

This provides a big opportunity for India’s infrastructure giants. Opportunities exist in electronics, semiconductors, IT, and blockchain integration, leveraging Vietnam's strength as a global manufacturing hub and India's scaling production base.

Collaboration between Indian entities such as IREL and Vietnamese research institutions opens up prospects in rare earths and mineral exploration too.