India Vietnam Trade

India Vietnam Trade Agreement

Last updated: Mar, 2023

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

During FY 2021, bilateral trade between India and Vietnam reached around US$ 14 billion.
Vietnam occupies the 101st position in FDI equity inflows into India with a cumulative FDI amount of US$ 5.35 million from April 2000 – September 2022.
Vietnam occupies a central position in India’s Act East Policy as also in the Indo-Pacific strategy.
According to Indian data for the financial year April 2021-March 2022, bilateral trade posted a growth of 27% and reached US$ 14.14 billion. Indian exports to Vietnam amounted to US$ 6.70 billion (an increase of 34%) while Indian imports from Vietnam amounted to US$ 7.44 billion (an increase of 21%).
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 3,736 commodities to Vietnam in FY 2021-22.
India’s exports to Vietnam stood at US$ 6.7 billion in FY 2021-22.
Major exported items from India to Vietnam include iron and steel (US$ 1,473.87 million); followed by cotton (US$ 554.94 million) in FY 2021-22.
India’s exports to Vietnam stood at US$ 3.7 billion from April-November 2022.
Major exported items from India to Vietnam include iron and steel (US$ 442 million) followed by marine products (US$ 327 million) etc. from April-November 2022.

Major imported items by India from Vietnam with amount & quantity

India imported 2,080 commodities from Vietnam in FY 2021-22.
India’s imports from Vietnam stood at US$ 7.4 billion in FY 2021-22.
Major items imported by India from Vietnam include electrical machinery & equipment & parts thereof; sound & tv recorders & reproducers & parts thereof (US$ 3,058.35 million); followed by inorganic chemicals; compounds of precious metals, or rare-earth metals, of radioactive elements or of isotopes (US$ 616.27 million) in FY 2021-22..
India’s imports from Vietnam stood at US$ 5.9 billion from April-November 2022.
Major items imported by India from Vietnam include telecom instruments (US$ 953 million) followed by consumer electronics (US$ 716 million) etc. from April-November 2022.

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 101st position in FDI equity inflows into India with a cumulative FDI amount of US$ 5.35 million from April 2000 – September 2022.

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

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 21 December 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 16-17 June 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 18th to 22nd 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 (10-15 September), ICCR’s cultural group visit to Vietnam (12-14 November) and the visit of a youth delegation from the Central Committee of the Ho Chi Minh Youth Union in November 2022.

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.

Contacts

Embassy of India, Vietnam
Address: 58-60, Tran Hung Dao Street, Hoan Kiem Distt, Hanoi
Email : om.hanoi@mea.gov.in
Telephone: +84-24-36330536

Officials
Mr. Sandeep Arya – Ambassador - amb.hanoi@mea.gov.in
Mr. Subhash P. Gupta - Deputy Chief of Missio - dcm.hanoi@mea.gov.in
Embassy of Vietnam, India
Address: EP-7A, Chandragupta Marg, New Delhi, Delhi 110021
Email : info@vietnamembassydelhi.in
Office Telephone: +91.11.2687.9868
Consular Section Telephone: +91.11.2687.9858

Officials
The Confederation of Indian Industry (CII), USA
H.E. Mr. Nguyen Thanh Hai– Ambassador
Dr. Do Thanh Hai - Deputy Chief of Mission: Minister Counsellor