Big Potentials For Future Of India-Vietnam Ties – Analysis


The year 2022 is significant in India-Vietnam relations as it marks the 50th year of the establishment of diplomatic ties. In this long journey of five decades, bilateral ties have developed in all fields, including politics, security and defence, science and technology, economy, trade, investment, tourism and people-to-people diplomacy. Visits by top leaders from either side to each other countries on frequent basis have kept the momentum in sharing mutual interests and concerns. Prime Minister Narendra Modi’s talks on telephone with the Secretary General of the Communist Party of Vietnam Nguyen Phu Trong on 15 April 2022 exchanging views on bilateral, regional and global issues is the latest in this narrative. In the post Covid-19 period, there is an urgency to deepen collaboration in building supply chain to meet domestic demand and join the global supply chain. Prime Minister Modi accepted Trong’s invitation to visit Vietnam and the dates are to be decided convenient to both sides.        

It may be recalled that during Modi’s visit to Vietnam on 2016, the India-Vietnam Comprehensive Strategic Partnership was established. Besides the wide-ranging cooperation, both Modi and Trong complimented each other over half century of both countries’ diplomatic journey. Reiterating the convergences of strategic interests, Modi underlined that Vietnam is an important pillar in India’s Act East Policy and Indo-Pacific Vision, and therefore sought to enhance the scope of the bilateral relationship. Both resolved to make further progress expeditiously on existing initiatives and explore new avenues that would be mutually beneficial. Since India decided to stay away from joining the RCEP because its concerns were not addressed, Modi requested Trong for greater facilitation of market access for India’s pharma for expeditious progress on existing initiatives.           

Though both countries subscribe to different political ideologies and thus have contrasting political systems, their economic and strategic interests are not affected and converge greatly. This political bonhomie is backed by historical and civilization links. The Cham monuments are a testimony of how Indian cultural tradition influenced in ancient times and India has contributed immensely towards the restoration of the monuments that withstood the vagaries of foreign invasion for centuries.

Both countries share common interests in the South China Sea. China’s rapid militarisation and island building activities on this global common is a matter of concern to many regional stakeholders as trillions of dollars of cargo transit through this critical maritime route. The worry is if a single power takes control, illogically and illegitimately, this critical part of the sea, it might impose its own rules of commerce. China’s aggressive approach and assertiveness on regional issues call for greater cooperation and coordination by other regional powers so that the existing equilibrium is not disturbed and tilts in favour of China. China claims sovereignty over all of the South China Sea, a huge source of hydrocarbons. However, several ASEAN member countries, including Vietnam, Philippines and Brunei, have counter claims. It was because of this serious development, Modi and Trong exchanged views on regional and global issues of shared interests. Trong must have sought clarification from President Xi Jinping during his recent visit to China. It is to be hoped that China would not cross the red line and unnecessarily exacerbate tensions in the region.   

Action-oriented events

In celebration of the half a century of diplomatic ties, External Affairs Minister of India S. Jaishankar and the foreign minister of Vietnam Bui Thanh Son launched a joint logo on the sidelines of the Special ASEAN-India Foreign Ministers’ Meeting in New Delhi in June (16-17) 2022. The event also marked the 30th anniversary of the ASEAN-India ties and 10th year strategic partnership with ASEAN member states. The logo was selected jointly by the two sides through a contest open for nationals of both countries. The image represents long-standing friendship between India and Vietnam symbolically through a peacock and a crane, the birds of national importance in the two countries respectively. 

It may be remembered that, besides both sharing traditionally close and cordial bilateral relations, India was the chairman of the International Commission for Supervision and Control (ICSC) which was formed in pursuant of the Geneva Accord of 1954 to facilitate the peace process in Vietnam. India initially maintained consulate-level relations with the then North and South Vietnam and later established full diplomatic relations with unified Vietnam on January 7, 1972.

India is cognizant that Vietnam is an important country of the ASEAN grouping but has territorial disputes with China in the South China Sea region. India’s role here becomes important because India has oil exploration projects in the Vietnamese waters in the South China Sea and therefore common interest to boost their maritime security cooperation to protect common interests. For India, Vietnam is an important partner in its Act East policy and the Indo-Pacific vision.

Over a period of time, both have expanded bilateral defence engagements, which include wide-ranging contacts between the two countries, including through defence policy dialogues, military-to-military exchanges, high-level visits, capacity building and training programmes and cooperation in the UN peacekeeping and bilateral exercises. Relations between the two countries were elevated to the level of ‘Strategic Partnership’ during the visit of Vietnam’s then Prime Minister Nguyen Tan Dung to India in July 2007. Bilateral ties were elevated to a Comprehensive Strategic Partnership during Modi’s visit to Vietnam in 2016. 

In the economic realm, there has been steady growth for both the sides. From $200 million in 2000, bilateral trade reached to $14.14 billion in 2021-22. While Indian exports to Vietnam accounted for $6.70 billion, its imports were slightly higher at $7.44 billion. In 2021-22, for India, Vietnam was the 23rd largest trading partner globally and the fourth largest among ASEAN countries, following Singapore, Indonesia and Malaysia.

More than four decades ago, late Prime Minister of Vietnam Pham Van Dong had remarked that Vietnam-India relationship is “as clear as a cloudless sky”. It is a testimony to Dong’s observation that bilateral relationships have remained and subscribed to that narrative. That statement has stood the test of time as the two important friends in Asia celebrate 50 years of diplomatic relationship in 2022. Indeed, the constant reiteration of Vietnam’s role in India’s Act East Policy and its Indo-Pacific Vision demonstrates that bilateral relations are cemented in all fields including but not limited to economy, trade, defence and tourism. 

Backed by civilizational links dating back to centuries, diplomatic relations have moved from normal ties to strategic partnership and further to comprehensive strategic partnership, demonstrating their commitment to unearth the inner strength and hone those for mutual benefits. This effort has been blessed by their share experience of national struggles for independence. While India fought against the British colonial masters to earned its freedom, Vietnam fought with Japan, the French and the US to drive them away and earned its freedom. These invisible shared historical experiences have contributed in building bonds between the governments of the two countries and the peoples. Despite having different political systems, diplomatic visits have continued.     

Vietnam is a vital and strategic partner for India and has become one of Vietnam’s top three partners as a comprehensive strategic partner along with Russia and China. However, despite different political systems, India-Vietnam relations are stronger than Vietnam-China or Vietnam-Russia relations. Vietnam appreciates that India’s Indo-Pacific Vision is positive and inclusive of nations and beyond who have a stake in it. ASEAN centrality and unity is an important element of the vision. India realises that Vietnam plays a key role in the region in its vision, especially with respect to the area of East Sea.  

Besides this political understanding, economic and trade cooperation is equally important in India-Vietnam bilateral relations. India is the most important market for Vietnam, accounting for 80 per cent of Vietnam’s total trade with South Asian nations. There is a desire in India to increase bilateral trade to reach $15 billion from the previous $13.2 billion. This is doable as Vietnam has specialised in a variety of economic sectors, thereby opening up vast vista for future expansion of economic relations. Vietnam has made great strides in agriculture and food processing. Its electronics industry is operating fruitfully. About 70% of mobile phones in India are produced in Vietnam   

Potential for educational cooperation

Building up political understanding at the government level and identifying sectors for doing business by framing institutional mechanism is alright but without educating people properly shall mean work half done. Therefore, cooperation in the field of education, so far neglected, ought to get priority. This would mean exchange of students, more lectures by academics in each other others’ countries and universities, increase the number of conferences and debate on critical issues and coming out with recommendations that would be useful to policy makers. For example, there are about 50 universities and a similar number of higher education establishments in Ho Chi Minh City alone. Connecting between universities and institutionalising student exchange programs could be the first step. Organising lectures and seminars/conferences, besides boosting research partnership are other areas that need to be prioritised. It is desirable that the Indian Council for Cultural Relations prioritises in allocating certain number fellowships dedicated to the students from Vietnam as a special case.       

Vietnam holds considerable economic potential, and its booming hospitality/service industry has been attracting about 30 million foreign visitors each year, higher than the number of arrivals in India. In July 2022, the Ministry of Industry and Trade, Vietnam, organised a trade promotion program in New Delhi, in which more than 150 Indian firms operating in different spheres attended. The program was intended to create an opportunity for leaders of business from both the countries to meet and cooperate in areas such as food processing, consumer goods, cosmetics, handicrafts, home furniture, and agricultural products. The memorandum of understanding signed between the Indian importers of Chambers of Commerce and Industry (IICCI) and the Association of Foreign Investment Enterprises (VAFIE) could be the catalyst.

The shipping route linking the central region of Vietnam and India was inaugurated on 27 July. This new initiative could be instrumental in realising both the countries to realise the $15 billion target of bilateral trade, marking a new milestone in the 50th anniversary of India-Vietnam diplomatic relations. Thus far, the bottleneck of traffic connectivity, especially the lack of a direct sea route connecting the two countries, has impeded in honing the full potentials between the two sides. The opening up of the new shipping route linking the central region of Vietnam and Kolkata, operated by Vietnam Maritime Corporation (VIMC) will open up greater business cooperation opportunities for Indian and Vietnamese businesses. 

Sea freight rates have increased in the past years, seriously affecting transport activities of the world. In order to address these lacunae, the VIMC is engaged with market research and expanded new sea routes connecting Vietnam and other regions around the world, including India.  

There are several areas in which both sides can work together to bring both countries closer. There are several beautiful sites in Vietnam, suitable for film shooting. Besides exploring co-production of film projects, there is a need to set up a one-stop facilitation centre to make this possible. Film is a powerful medium to send message and that contribute to development of friendship between the peoples and also send other social messages, besides entertainment.  

Dr. Rajaram Panda

Dr. Rajaram Panda, Former Senior Fellow at Nehru Memorial Museum and Library, a think tank under the Ministry of Culture, Government of India, Former ICCR India Chair Professor, Reitaku University, Japan, and former Senior Fellow, IDSA, New Delhi E-mail: [email protected]

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