Past and Present
Vietnam and India share a strong relationship with much scope for deepening of relations in the future. These relations have a history stretching back not only to 46 years of diplomatic ties since 1972, but to nearly 2000 years of interactions. During colonial times, people from both countries showed their sympathy and support to each other, and prominent leaders from both countries, like Jawaharlal Nehru and Ho Chi Minh, had personal contacts even before independence. India has also supported Vietnam in several wars in the past.
When Vietnam and India began undertaking reforms almost simultaneously in the 1980s and 1990s, a new momentum of relations was created. New Delhi and Hanoi established their Strategic Partnership in 2007, which was subsequently upgraded to the Comprehensive Strategic Partnership (CSP) in 2016. India is one of four countries with which Vietnam has a CSP. India and Vietnam have a time-tested, problem-free relationship, which is currently better and stronger than it has been. In line with the CSP, bilateral cooperation has expanded in many areas including economy, culture, and science, and has deepened in areas such as security, defence, and politics.
The political relationship between the two countries has been strengthened through visitsby the respective leaders. Security and defence cooperation is also extremely strong, with a vision for long-term cooperation in defence. Several defence programmes exist, including training of naval and air force officers for capacity building and towards contributions to UN peacekeeping forces.
The defence Line of Credit (LOC) worth US$ 100 million from India to Vietnam towards building patrol boats has been extended, and recently, an LOC of US$ 500 million has been offered to Vietnam. Cooperation in maritime security, too, has been robust. Indian naval ships pay port calls to Vietnam frequently, and the two countries even recently held joint naval exercises for the first time.
Economic cooperation has also witnessed tremendous progress. Between 2007 and 2017, bilateral trade surged from US$ 1 billion to US$ 7.6 billion – marking a 700 per cent rise. The volume of trade between the two countries reached US$ 3.5 billion in the first four months of 2018, and is expected to rise to US$ 9-10 billion by December 2018. Indian companies have invested approximately US$800 million in Vietnam, placing India at the 27th position of the 125 countries that invest in Vietnam. Cooperation in oil and gas exploration remains strong. Investment by India’s Oil and Natural Gas Corporation Limited (ONGC) in Vietnam began in 1988 and still continues. Moreover, several major companies from India are now looking to invest in Vietnam. In 2017, 44 new investment projects were committed by India, valued at a total of US$ 157 million. There are tremendous prospects for the future, although at the moment the total value remains low. Tourism, too, is a high potential area, with the numbers of Indian tourists visiting Vietnam increasing every year. In 2017, 170,000 arrivals were recorded, with a scope for further increase in the future.
Cooperation in the science and technology (S&T) sector has been healthy and continues to progress. Documents have been signed for bilateral cooperation in areas such as nuclear energy and outer space for peaceful purposes; information technology (IT); cyber security; and a station for receiving and processing data within the framework of ASEAN-India cooperation.
In the education sector, Vietnam receives approximately 170 scholarships annually from the Indian government. Additionally, several self-financed Vietnamese students travel to India for education. In the cultural sphere, a Centre for Indian Studies (at the Ho Chi Minh National Academy of Politics) and an Indian Cultural Centre were inaugurated in Vietnam. Similarly, a Centre for Vietnam Studies was inaugurated in India. Frequent exchanges of artists and cultural troupes between the two countries are also common.
New Delhi and Hanoi maintain close coordination on international issues as well. Vietnam is in favour of India’s increased engagement with the Southeast Asian region and beyond. Vietnam supports India’s bid to become a permanent member of the UN Security Council as well for the non-permanent member position for the 2021-22 period.
The future of India-Vietnam relations is extremely promising for the following reasons:
First, there exists a strong foundation of historical relations between the two countries. Second, both India and Vietnam have immense potential in terms of economic relations, given how both are the fast growing economies: India is growing at 7 per cent, and Vietnam, at approximately 6.8 per cent. Third, both countries are situated in Asia, a dynamic region. India is a key pillar in the Indo-Pacific framework, and Vietnam is an important member of ASEAN. Moreover, similarities in challenges both countries face have led to a convergence of interests, especially strategic interests.
Increased focus on certain areas will facilitate further development and deepening of the relationship. More high-level exchanges will strengthen the political relationship. Deepening security and defence cooperation will require acceleration in the implementation of defence programmes, like the construction of patrol boats, utilisation of the US$ 500 million LOC for defence cooperation, and other defence and security programmes.
India has had several achievements in the S&T sector, such as in space, IT etc. Cooperation in these fields would help capacity building in Vietnam. Moreover, India has a very good education system, which can make important contributions to human resource development in Vietnam. At present, although several students from Vietnam study in India, the numbers are not high, and can be increased. Indian investment in Vietnam’s education sector in the form of Indian universities like IITs and IIMs would benefit Vietnam.
At present, Indian investment in Vietnam is less than US$ 1 billion, which is quite low in comparison to Indian investments in other countries. Bilateral trade is increasing but is yet to meet expectations, compared to other countries with which India and Vietnam trade. Special attention should be paid to economic cooperation. There is a need to deepen investments as well. Vietnam expects more trade from India because of the strategic importance, and not just economic. More investment would mean a more enhanced Indian presence in the region.