Vietnam: An Anchor In India’s Act East Policy

Vice-President of the Socialist Republic of Vietnam, Dang Thai Ngoc Thinh was on an official visit to India for delegation level talks with the Vice-President of India, Mr. M. Venkaiah Naidu. Vietnam is a critical anchor in India’s Act East Policy and India’s larger Indo-Pacific Strategy. Further, Hanoi is key to New Delhi’s approach to the CLMV (Cambodia, Lao PDR, Myanmar and Vietnam) countries as the main objective is to nurture extensive economic and strategic links with South-east Asia.

The focus of the recent visit was to further reinforce the India-Vietnam Comprehensive Strategic Partnership. One of the highlights during Vice-President Dang Thai Ngoc Thinh’s visit was the announcement of direct flights connecting India and Vietnam. Additionally, an agreement was signed to establish a resident office of Voice of Vietnam in Delhi. The Vietnamese Vice-President also visited Bodh Gaya during her visit.

In 2016, when Prime Minister Narendra Modi visited Vietnam, the bilateral relations was elevated to a Comprehensive Strategic Partnership with the goal of supporting a rules-based regional order. Vietnam maintains a positive outlook towards India’s Act East Policy and welcomes a robust role for India on regional issues. Bilateral defence and security cooperation has strengthened with the exchange of high level visits, service-to-service cooperation, naval ship visits, training and capacity building, defence equipment procurement and transfer of technology in addition to cooperation in regional forums, such as, ASEAN Defence Ministers’ Meeting-Plus, East Asia Summit, Mekong Ganga Cooperation, Asia Europe Meeting, the UN and WTO.

India had extended a US $500 million defence line for credit in 2016. Contract has been signed for offshore High-speed Patrol Boats between Larsen & Toubro and Vietnam Border Guards using the line of credit for defence procurement. Furthermore, India has committed a grant of US$ 5 million for the construction of an Army Software Park at the Telecommunications University in Nha Trang. Besides, there is a MoU between the coast guards of the two countries to combat transnational crimes. In addition, there is a MoU on cyber security between Ministry of Public Security of Vietnam and Ministry of Electronics and Information Technology of India.

In addition to defence and security cooperation, economic cooperation is an important pillar in the bilateral relations. India features as one of Hanoi’s top ten trading partners. Within ASEAN, Vietnam is the second largest export destination for India following Singapore and the fourth largest trading partner following Indonesia, Singapore and Malaysia. The focus is especially on five important sectors; including garment and textile, pharmaceuticals, agro-commodities, leather and footwear and engineering.

As one of Southeast Asia’s fastest developing economies, Vietnam offers several opportunities for India. India has invested across sectors such energy, mineral exploration, agro-processing, sugar manufacturing, agrochemicals, IT and auto components. Vietnam has welcomed Indian investments including in the contested South China Sea. ONGC-Videsh has stakes in hydrocarbon exploration blocks in Vietnam including Block 6.1 which is a producing asset and Block 128, which is an exploratory asset in Phu Khanh offshore basin. Besides ONGC, several Indian companies including Tata Power, Reliance Industries, Gimpex, JK Tyres, and Glenmark Pharmaceuticals Ltd are pursuing business opportunities in Vietnam.

The roots of India-Vietnam strategic partnership can be traced back to history. In 1954, Pandit Jawaharlal Nehru was among the first visitors to Vietnam after its victory against the French at Dien Bien Phu. Subsequently, President Ho Chi Minh, regarded in India too, as Uncle Ho, visited India in 1958. This was followed by the First President of India, Dr. Rajendra Prasad’s visit to Vietnam in 1959. Since then, the high level visits have continued and this has led to consolidation of bilateral ties.

As Vietnam lies at the heart of India’s Act East Policy, India will continue to invest in elevating the India-Vietnam Comprehensive Strategic Partnership to newer heights factoring in the historical influences, common regional and global objectives and intensify cooperation in the broader Indo-Pacific region in the backdrop of the unfolding geo-strategic developments.

Script: Dr. Titli Basu, Strategic Analyst on East & South-East Asia.