Dr Doan Duy Khuong, Vice President of the Vietnam Chamber of Commerce and Industry (VCCI), recently had a meeting with Mr Pankaj Kapoor, President of the Haryana Chamber of Commerce and Industry, accompanied by 20 Indian companies involved in pharmaceuticals, garments and agriculture. The purpose of the delegation's visit is to strengthen cooperation with Vietnamese businesses in these areas.
According to VCCI, Vietnam and India established formal diplomatic relations on January 7th 1972. The two countries have long traditional relations. So far, the two countries have signed trade agreements, the agreement to avoid double taxation, the agreement on promotion and protection of investments, consulates, cultural cooperation, aviation, tourism, and mutual legal assistance on fighting crime. The two countries have also signed agreements on political consultation between the two foreign ministries, cooperation on Mines and Geology, Environment, National Medicine and Protocol on defence cooperation. At the 15th ASEAN Summit in October 2009 in Hua Hin, Thailand, the two countries signed a memorandum of understanding that recognised Vietnam’s market economy status (MES).
On trade, in 1982, the two countries established a joint committee on economic, cultural, science and technology cooperation. This is an important mechanism to help the two sides promote exchanges and cooperation in different sectors, including the construction of the Action Plan every 3 years. Until now, the committee has organised 13 meetings.
Statistics show that trade between the two countries increased rapidly, from US$72 million in 1995 to more than US$1billion in 2006, nearly US$2.5 billion in 2009 and reached US$2.5 billion in 2010. The major exports of India to Vietnam are: foodstuff for cattle, mobile phones, machinery, pharmaceuticals, plastic materials, iron, steel and other metal types, pharmaceutical materials, textile materials and leather and pesticides. The main export items of Vietnam to India are: coal, pepper, electronic components, rubber, cinnamon, machinery and equipment, steel, fiber and footwear. In particular, two-way trade between Vietnam and India in the textile sector over the years has significantly increased, especially under the Free Trade Agreement between ASEAN and India from early 2010, many textiles items began reducing the tax and applying duty-free under committed route. Specifically, cotton textile exports products including yarn, fabric and clothes from India to Vietnam have increased in recent years, from US$8.9 million in 2007 to US$26.1 million in 2009, the average annual growth is 71.24 percent.
By the end of the first 4 months of 2013, total bilateral trade volume reached more than US$1.8 billion, up 49 percent compared to the same period last year and at this rate, the two sides expect to reach US$5 billion this year.
Regarding investment cooperation, by December 2012, India had 69 projects, ranking 30th out of 98 countries and territories investing in Vietnam, with registered capital of US$252 million. India’s projects focus on the fields of industrial processing and manufacturing with 22 projects, total investment of US$94.4 million, accounting for 45 percent of capital investment. Following that is the mining sector with 3 projects, total investment of US$86 million, accounting for 41.7 percent of total capital investment.
Thus, excluding the three oil and gas exploration projects, India invests in 16 localities in Vietnam, but mainly in Tuyen Quang province with Alliance mining project with total capital of US$15 million, and in Ninh Thuan province in Vietnam Dhampur Sugar project with total investment of US$22 million. Most Indian capital is in the form of 100 percent foreign owned capital (32 projects with a capital of US$103.6 million), accounting for over 50 percent of total investment. The remaining capital is in the form of joint ventures and business cooperation contracts.
Currently, India has about 70 business representative offices in Vietnam. They mainly operate in the fields of pharmaceuticals, machinery, equipment, accessories, chemicals and agricultural supplies.
Indian companies invest in Vietnam in the areas of telecommunications, information technology, motorbikes, fertilisers, pharmaceuticals and electrical equipment. Some typical projects include a joint venture project to build a gas plant in South Con Son and a joint venture with FPT and APTECH to establish training centre for Vietnam’s information technology professionals in India.
Regarding investments to India, until now, Vietnam has one investment project in India.
In education and training, India helps Vietnam in many long term and short term training programmes with 100 types of scholarships annually, both in the framework of bilateral and multilateral (Ganges-Mekong Cooperation and Colombo Plan), in many areas, especially agricultural training, information technology, English and remote sensing.
VCCI has so far signed a cooperation agreement with the Federation of Chambers of Commerce and Industry of India, the agreement with the Association of Indian exporters to promote support activities for the two countries’ businesses in finding export partners.
In March 2001, with the support of the Indian Embassy in Hanoi, VCCI and Centre for Development of Information Technology (CDIT) launched a website "Online Centre for Trade Information Vietnam-India" and introduced catalogue of over 130 Indian companies in the field of industry and information technology. In April 2001, VCCI in conjunction with the Chamber of Commerce and Industry of India and Vietnam General Consulate in Mumbai held an exhibition of Vietnamese goods. In February 2009, VCCI branch in Ho Chi Minh City signed a cooperation agreement with the Indian Chamber of Commerce to help further promote investor relations and trade between the two countries. In April 2011, VCCI signed a cooperation agreement with the Association of Chambers of Commerce and Industry of India (ASSOCHAM).
Notably, in 2010, the Prime Minister allowed VCCI to establish the Vietnam-India Business Forum. The forum officially went into operation in 2011 and initially brought many useful cooperation contacts for the two country’s businesses.
In addition, VCCI also collaborated with the Indian Embassy in Vietnam to send business delegations to explore the Indian market, and organise workshops to introduce potential business partners for the Indian market in Ho Chi Minh City, Hanoi, Hai Phong, Da Nang, Can Tho, Vinh Phuc, Thai Binh, Hai Duong, Thanh Hoa, Nghe An, Quang Ngai, Khanh Hoa and Lam Dong.
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