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India Vietnam Trade

Vietnam occupies a central position in India’s Act East Policy as also in the Indo-Pacific strategy.

Last updated: Apr, 2024

Introduction

India and Vietnam share traditionally close and cordial bilateral relations. The countries had historical roots in the common struggle for liberation from colonial rule and the national struggle for independence, Vietnam is a partner county of India within the ASEAN framework and Mekong Ganga framework.

India-Vietnam Trade

  • Vietnam occupies the 94th position in FDI equity inflows into India with a cumulative FDI amount of US$ 7.83 million from April 2000-September 2023.
  • Vietnam occupies a central position in India’s Act East Policy as also in the Indo-Pacific strategy.
  • According to Indian data for the fiscal year 2022-23, bilateral trade reached US$ 14.69 billion. Indian exports to Vietnam amounted to US$ 5.90 billion, while Indian imports from Vietnam amounted to US$ 8.79 billion.
  • Vietnam is trying to diversify its trade and intends to make use of India’s growing market. The key Vietnamese exported products to India are mobile phones and components, computers, electronic products and components, chemicals, plastics, rubber, coffee, pepper, and cashew. The main Indian exported products to Vietnam are iron and steel products, textile materials, fishery, corn, pharmaceutical, pharmaceutical raw materials, and auto spare parts.

Major exported items from India to Vietnam with amount & quantity

  • India exported 3,926 commodities to Vietnam in FY23.
  • India’s exports to Vietnam stood at US$ 5.90 billion in FY23.
  • Major exported items from India to Vietnam include engineering goods (US$ 769.8 million); followed by Meat, Dairy and Poultry Products (US$ 511.4 million), marine products (US$ 287.1 million), and Organic and Inorganic Chemicals (US$ 246 million), among others in April-November 2023
  • India’s exports to Vietnam stood at US$ 3.52 billion from April-November 2023.

Major imported items by India from Vietnam with amount & quantity

  • India imported 2,302 commodities from Vietnam in FY23.
  • India’s imports from Vietnam stood at US$ 8.79 billion in FY23.
  • Major items imported by India from Vietnam include electrical machinery and equipment (US$ 2.6 billion) followed by iron and steel (US$ 522 million), nuclear reactors, boilers, machinery, and mechanical appliances (US$ 492 million), copper and copper products (US$ 323 million), and inorganic chemicals (US$ 305 million), during April-November 2023.
  • India’s imports from Vietnam stood at US$ 6.21 billion from April-November 2023.

Economic Relations and Investments

  • India’s investments in Vietnam are estimated at around US$ 1.9 billion including investments routed through third countries. According to Vietnam’s Foreign Investment agency, as of April 2021, India has 299 valid projects with total invested capital of US$ 909.5 million, ranking 26th among countries and territories investing in Vietnam. Significant sectors of Indian investment are energy, agro-processing, mineral exploration, agriculture, manufacturing, agrochemicals, IT, and auto components.
  • Currently, India is one of the top 8th trading partners of Vietnam while Vietnam is the 15th largest trading partner of India and the fourth in Southeast Asia. Vietnam occupies the 94th position in FDI equity inflows into India with a cumulative FDI amount of US$ 7.83 million from April 2000-September 2023.
  • Under the Mekong Ganga Cooperation (MGC) framework, India has been taking up Quick Impact Projects (QIPs), each valued at US$ 50,000, in different provinces of Vietnam for the development of community infrastructure. India has 317 valid projects worth over US$ 1 billion in Vietnam, ranking 23rd out of the 129 countries and territories investing in that country.

Recent Trends & development

  • As informed in January 2023, India and Vietnam are set to begin talks on a potential trade agreement in an effort to boost bilateral trade and investment.
  • Ministry of External Affairs (MEA) Secretary (East) Mr. Saurabh Kumar and Vice Chairman of National Boundary Commission of Vietnam Mr. Trinh Duc Hai on June 1, 2023 discussed ways to further strengthen India-Vietnam bilateral relations including in the realm of defence, security, and maritime cooperation.
  • The Vietnam Trade Office in India, in collaboration with the National Investment Promotion and Facilitation Agency of India (Invest India), and the Federation of Indian Export Organisations (FIEO) held a teleconference on February 22, 2023 in which they discussed boosting trade in agriculture and processed food.
  • Defence Minister Mr. Rajnath Singh on June 19, 2023, held talks with his Vietnamese counterpart General Mr. Phan Van Giang, who is on a two-day visit to India.
  • India and Vietnam discussed measures for cooperation in the areas of law and justice. The two sides agreed to have official-level deliberations to take forward the discussions on broad areas of cooperation in the field of law and justice including entering into MoUs.
  • In the context of COVID-related travel limitations, Prime Minister Shri Narendra Modi and Prime Minister Mr. Nguyen Xuan Phuc held the first-ever India-Vietnam Virtual Summit on December 21, 2020, during which they adopted a historic “Joint Vision for Peace, Prosperity and People” to guide the future development of bilateral relations. On the sidelines of the Virtual Summit, the two Foreign Ministers also signed a Plan of Action for the period 2021-23 to implement the Joint Vision.
  • Speaker of Lok Sabha, Mr. Om Birla visited Vietnam in April 2022. During his visit, he stressed that India and Vietnam should further expand their cooperation in areas such as climate change, sustainable development, health care, and the digital economy.
  • Defence industrial collaboration is another area in defence relations. In June 2022, 12 High-Speed Guard Boats built by Indian manufacturer M/s Larsen & Toubro were handed over to Vietnam.
  • Foreign Minister of Vietnam Mr. Bui Thanh Son attended the Special ASEAN-India Foreign Minister’s Meeting held in New Delhi on June 16-17, 2022, to mark the 30th Anniversary of ASEAN-India Dialogue Relations.
  • The visit of India’s Defence Minister Mr. Rajnath Singh to Vietnam in June 2022 progressed the defence cooperation, including the signing of a new "Joint Vision Statement on India-Vietnam Defence Partnership towards 2030” and a “Memorandum of Understanding on Mutual Logistics Support”.
  • Both countries are emphasising the need for promoting trade and investment and cooperation in hi-tech for economic development taking the economic relationship to a much higher level for mutual benefits. In pursuance of this objective, Vietnam’s the Ministry of Industry and Trade, Government of Vietnam sent India a business delegation led by Mr. Do Quoc Hung, Deputy Director General of the Ministry, and 20 business communities in multi-sectors to India from July 18-22, 2022.
  • The two countries also have regular exchanges at the level of provinces, academic and thinktank institutions and youth delegations. Some of the recent exchanges between India and Vietnam include the visit of a delegation from Khanh Hao Province to India (September 10-15), ICCR’s cultural group visit to Vietnam (November 12-14) and the visit of a youth delegation from the Central Committee of the Ho Chi Minh Youth Union in November 2022.
  • On June 19, 2023, in New Delhi, Minister of Defence of India, Mr. Rajnath Singh and Vietnam's Minister of National Defence, General Mr. Phan Van Gang, discussed advancing bilateral defence cooperation. They focused on strengthening collaboration in defence industries and maritime security. India gifted the INS Kirpan Missile Corvette to enhance Vietnam's Naval capabilities, marking a significant milestone. The Defence Minister of Vietnam also visited DRDO headquarters to explore cooperation in defence research and joint production. The visit underscores Vietnam's importance in India's Act East Policy and the Indo-Pacific region.
  • DPIIT, Ministry of Commerce and Industry, hosted a Vietnamese delegation from July 31 to August 4, 2023, following a reciprocal visit to Vietnam in March. Minister of State for Commerce and Industry of India, Mr. Som Parkash emphasized fostering collaboration and foreign investments in the logistics sector during the event.
  • The 5th meeting of the India-Vietnam Joint Trade Sub-Commission (JTSC) took place in New Delhi on August 8, 2023. Co-chaired by Mr. Rajesh Agrawal and Ms. Phan Thi Thang, it resumed after a four-year hiatus due to the COVID-19 pandemic and other factors. Both sides reviewed the progress on bilateral trade and economic cooperation. Both sides agreed to look into better ways for shipping goods directly, working together on moving freight, and improving air connections to solve logistics issues.

Conclusion

India has a long-standing development partnership with Vietnam. It has made positive contributions towards capacity building, sustainable development goals and socioeconomic development. Both nations are working towards building stronger bilateral relations.

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