India Calling Vietnamese Enterprises to Invest in Food Sector

India has now become one of the ten largest trade partners of Vietnam. Mr Nguyen The Hung, Deputy Director of VCCI - HCM said that Vietnam previously exported to India mainly simple goods, but since the signing of ASIAN-India Free Trade Agreement, goods imported from Vietnam have become more diverse, including mobile phones and parts, machinery and equipment - accessories, computers and electronics products. Vietnam imports some products from India such as maize, fodder and raw materials, pharmaceutical products, plastic materials and so on. The trade turnover between the two countries reached US$2 billion in 2009 and increased to US$4 billion in 2012. Particularly in the first 5 months of 2013, two-way trade volume reached US$2.24 billion (Vietnam’s exports valued at US$1.02 billion and its imports US$1.22 billion) and it is expected to reach US$5 billion this year and about US$7 billion in 2015.

 

Particularly, in the field of investments, as of April 2013, India had more than 70 valid projects in Vietnam with a total investment of about US$252 million. Vietnam has only one project in India, invested by FPT Technology Development and Investment Company, with the total investment capital of US$150,000 to produce software and implement IT services. In addition, the cooperation in industry and energy has been continuously strengthened, as evidenced by investment projects and joint ventures in specific sectors such as textiles, footwear, chemicals and steel.

 

Speaking at the meeting, Mr Abhay Thakur, Indian Consul General in HCM City, said that India wants to further invest in Vietnam in such areas as electricity and mining. Especially, Indian businesses still want to participate in the restructuring of Vietnam’s companies in the form of buying shares of Vietnamese companies. However, the biggest barrier in trade relations between Vietnam and India is that there is no direct flight between the two countries. Indian Consul General Abhay Thakur stressed: "Although there is no direct flight, the number of visas issued has increased about 15 percent annually; if there is direct flight, the number will increase significantly".

Mr Le Thai Hoa, Deputy Director of the West Asia and Africa Department of the Ministry of Industry and Trade, said potential cooperation between Vietnam and India is still very big, especially in the commercial, industrial and energy sectors. The ASEAN-India Trade Agreement will create new impetus to promote economic, trade and investment relations. However, to be able to exploit the advantages of the agreement on trade, goods and services, there should be positive contribution of the two business communities. At the same time, the authorities of Vietnam and India should further enhance the operational support of the business community, market information and business opportunities.

 

According to Mr Talleen Kumar, Director of the Promotion and Industry Policy Department of the Indian Ministry of Trade and Industry, in recent years the Indian government has implemented many positive reforms to accelerate the process of international economic integration in many areas, focusing on facilitating foreign investment. Specifically, India attracts foreign investment with transparent policies; administrative improvement; increasing share in the manufacturing sector; better competitiveness; and more investment in infrastructure and business environment upgrading. Foreign investors wishing to invest and do business in India will be provided with online services like registering licenses, brand protection and intellectual property.

 

At the meeting, the officials of the Indian trade delegation also urged Vietnamese enterprises to invest in the field of food processing industries. Mr JP Meena, Director of the Ministry of Food Processing Industries, said Indian food is one of the dynamic sectors of India. India is the 3rd largest market in the world in the consumption of foods, with a total value up to US$181 billion a year and an average growth rate in the food industry of 21.6 percent a year. In recent years, the rising average income has helped increase consumer demand for expensive prepared food in India. However, the majority of the market demand is not met.

 

Mr JP Meena stressed that India encourages Vietnamese businesses to invest in the fields of production and food processing. To develop this sector, India has built 30 Mega Food Parks. These connect regional production and food processing to meet the needs of domestic consumption and export. At the Mega Food Parks, in addition to infrastructure systems and roads, human resources as well as the other necessary conditions for production were prepared. Investors only have to bring machinery and technology to be able to begin production.