Vietnam, India Remove Barriers to Sustain Trade Ties

9:25:01 AM | 8/25/2020

Vietnam and India need to capitalize on the framework of ASEAN-Oceania cooperation to promote digital economic development and application of information technology in the administrative system to strengthen connectivity, bilateral cooperation and regional integration of India - ASEAN - Oceania.

Data from Vietnam Customs shows that the two-way import and export turnover between Vietnam and India in the first six months of 2020 reached US$4.2 billion, down more than 20% compared to US$5.5 billion over the same period last year. However, trade started to grow again in June with an increase of 72% over May and nearly reached its normal level in 2019 of about US$1 billion a month.

According to Vietnamese Ambassador to India Pham Sanh Chau, the slump in trade is due to the fact that in the early stages of the Covid-19 pandemic, countries applied strict lockdown and social distancing, resulting in interrupted and seriously affected trade flows. In India, the import and export turnover decreased by nearly 60% in April. The bilateral trade between Vietnam and India has also been affected.

In order to promote cooperation in the context of the unpredictable Covid-19 pandemic, according to Mr. Chau, it is necessary to have the political determination of the two countries in particular and countries in the region in general in order to support businesses to solve difficulties and problems. In particular, the promotion of information technology application will effectively support development cooperation bilaterally and regionally.

“As the Covid-19 pandemic is strongly affecting trade flows and the global economy, India - ASEAN - Oceania need to promote trade liberalization and limit the application of tariff and non-tariff barriers,” Ambassador Pham Sanh Chau emphasized.

In order to make it easier for businesses to circulate and trade goods during the Covid-19 period, India started issuing certificates of origin electronically when the pandemic broke out. This is unprecedented and has not been specified in the ASEAN-India free trade agreements. As Chair of ASEAN, Vietnam has worked together with India and ASEAN countries in this regard.

The Vietnamese Embassy and Trade Office in India have organized online booths to support Vietnamese businesses to promote their goods and services in six major fields, namely biotechnology, pharmaceuticals and medicine; agricultural products and related products; energy, renewable energy, electricity; supply chain and logistics; information technology and telecommunications equipment; the value chain of production, attracting about 200 stalls of businesses and diplomatic missions in India and other countries in the region.

The Vietnamese Embassy in India has supported to clear 58 pepper containers stuck near the border area of ​​India and Nepal. The involved parties were had trouble in procedures and if there had been no joint efforts, it would have been impossible to solve.

As the global economy is still seriously affected by the Covid-19 pandemic, the Vietnam-India strategic partnership will still have room for special development in economic cooperation. Hopefully, the two governments will continue to create favorable conditions to support businesses of the two countries to increase exchanges, connections and cooperation to increase bilateral trades to US$15-20 billion in the near future.

Dr. Doan Duy Khuong, Vice President of VCCI

Despite efforts in promoting digital economy and helping businesses trade goods more conveniently, according to Ambassador Pham Sanh Chau, connectivity among India - ASEAN - Oceania has remained low for the past six months. The multimedia connectivity projects between Northeast India, Myanmar and Thailand have yet to cross the Indian border, let alone expand to Cambodia, Laos and Vietnam.

Besides, the fact that India announced its withdrawal from the Regional Comprehensive Economic Partnership (RCEP) after seven years of negotiation is also a pity. As Chair of ASEAN 2020, Vietnam always welcomes and expects India to join this mechanism at an appropriate time. ASEAN and Vietnam always accompany India in removing difficulties and problems on free trade agreements.

In the coming time, according to Ambassador Chau, ASEAN-India and Vietnam-India ties should continue to strengthen economic integration, and promote the development of global value chains, cooperation in electricity, electronics, mobile phones, machinery and equipment, new and renewable energy; cooperation in agriculture, science and technology; cooperation in digital economic development and information technology.

By Thu Huyen, Vietnam Business Forum