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Int'l Cooperation

Last updated: Thursday, August 16, 2018

 

Vietnam, India Expand Trade Cooperation

Posted: Thursday, January 18, 2018

Vietnam and India are striving to increase their two-way trade value to US$15 billion by 2020.

In 2017, Vietnam and India celebrated the 45th anniversary of diplomatic relations establishment and the 10th anniversary of strategic partnership. The bilateral relationship is now developing very well in all aspects of cooperation.

Both sides have promoted cooperation in all fields namely politics - diplomacy, security - defence, economics, science - education, and culture - society.

India is the 15th largest merchandise export market and the 10th largest import market of Vietnam. The bilateral trade value is stable, reaching over US$5.5 billion in 2016 and the trade performance is quite balanced. Agricultural products are a potentially good export to the Indian market as they carry high quality and reasonable prices. Electronics and computer accessories are also potential exports for Vietnam. India is now one of leading suppliers of textile and garment inputs for Vietnam, especially after 2010 when ASEAN-India Trade in Goods (AITIG) Agreement came into effect.

On investment, India is now Vietnam's largest FDI partner in Central and West Asia, with 164 projects and over US$755 million of investment capital, which mainly focus on processing, information technology and mining industries. It ranked 28th out of 116 countries and territories investing in Vietnam.

Although the economic and trade relations between Vietnam and India have increased significantly over the time, they have not come up with political, diplomatic, security and defence relations nor matched up with the two countries’ potential. Mr Nguyen Xuan Trung from the Vietnam Institute of Indian and Southwest Asian Studies (VNIISAS) attributed this reality to cultural, religious factors, working manner, institutional differences and commitment fulfilments. These puzzle companies of both countries in contacting each other amid growing fears of cooperation risks and diffidence. They lack information about each other's market as well as about target partners.

In addition, as their similar economic structures, the rivalry of their products is not high. The complementarity between the two economies is not much. Furthermore, the competitiveness of Vietnamese products in India and Indian products in Vietnam is limited in relation to products originated from other countries such as China and ASEAN.

According to experts, to further develop Vietnam - India trade relations, the two sides need to strengthen mutual understanding, promote information and introduce each other. They need to enhance trade promotion performances and increase trade promotion activities. It is important that Vietnam and India need a bilateral FTA of their own.

As known, Indian companies are keen to invest in Vietnam, especially in agriculture. India expects to export its key agricultural products to Vietnam such as grapes, sesame seeds and pomegranates. Meanwhile, it wants Vietnam to invest in building seafood processing plants and planting dragon fruits to supply to over 1.3 billion people in India.

For its part, Vietnam wants India to facilitate the former to further export its key agricultural products such as coffee, rubber, cashew nuts and pepper and consider importing chicken, pork and fruits. Vietnam also asks India to lower tariffs on Vietnam's agricultural products to balance the bilateral trade to which Vietnam is currently running a deficit.

In particular, ASEAN and India signed the Free Trade Agreement on which India based to promote trade with CLMV countries (Cambodia, Laos, Myanmar and Vietnam). The governments of the two countries are taking full advantage of benefits of these trade agreements. Moreover, the Regional Comprehensive Economic Partnership (RCEP) Agreement, which comprises India and some Southeast Asian countries, including Vietnam, is being negotiated. This is a solid foundation for Vietnam - India trade relationship to be further expanded in the coming time.

Anh Mai








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