Amid the evolving post-Covid global landscape, India and Vietnam, an emerging Southeast Asian dynamo, are set to impart a fresh momentum to their multi-layered ties during the visit of Chairman of Vietnam National Assembly Vuong Dinh Hue to India.
A high-level parliamentary delegation is accompanying Mr Hue on the four-day visit to India from December 15 to 19. Mr. Hue’s visit, at the invitation of Vice-President and Chairman of Rajya Sabha Venkaiah Naidu, and Speaker of Lok Sabha Om Birla, will mark the revival of in-person high-level exchanges between the two countries which suffered during the pandemic.
The visit marks the start of celebrations of five years of the Comprehensive Strategic Partnership between India and Vietnam and the golden jubilee anniversary of establishment of diplomatic relations between the two countries. The NA Speaker, also a member of the Politburo of the 13th Communist Party of Vietnam Central Committee (CPVCC), will speak at a function organised by Indian Council of World Affairs (ICWA), India’s premier think tank. He will also be present at the inaugural ceremony for the new residential building of the Vietnam Embassy in New Delhi. The Speaker’s visit will set the tone for the state visit of Vietnam’s prime minister early next year.
In a gesture that underscores special ties between New Delhi and Vietnam, India is leaving no stone unturned not only to welcome the speaker, but also to make his visit substantive and forward-looking. Officials said that the two sides will be signing MoUs in the areas of pharmaceutical, healthcare, science and technology, communication and environment to deepen and diversify ties. The two sides are also expected to officially announce the extension for India’s ONGC to explore and exploit oil and gas in the South China Sea, which will underline New Delhi’s commitment to deepen energy partnership with Vietnam in the face of Chinese pressure.
Ahead of the visit, officials said that one can expect positive breakthroughs in many areas. Economic ties, already on an upward curve, are expected to get a boost during a business event to be addressed by the Speaker of National Assembly. CEOs of leading Indian companies are expected to participate in this forum aimed at upscaling two-way trade and investment. Bilateral trade has grown to around $12 billion. The disruption caused by the pandemic had impacted bilateral trade, but trade volumes are again seeing an uptick. In FY 2020-21, Vietnam was the 15th largest trading partner of India globally and the 4th largest within ASEAN, after Singapore, Indonesia and Malaysia. For Vietnam, India is the 10th largest trading partner globally. India’s investments in Vietnam are estimated at around US$ 1.9 billion including investments routed through third countries. According to Vietnam’s Foreign Investment Agency, as of April 2021, India has 299 valid projects with total invested capital of US$ 909.5 million, ranking 26th among countries and territories investing in Vietnam. Indian investments in Vietnam are confined to energy, mineral exploration, agro-processing, sugar, tea, coffee manufacturing, agro-chemicals, IT and auto components. Vietnam has six major investment projects in India with total estimated investment of US$ 28.55 million, primarily in the areas of pharmaceuticals, information technology, chemicals and building materials.
Doi Moi: A work in progress
Economic relations between India and Vietnam are set to scale new heights in coming days as the Southeast Asian country continues to sustain momentum in economic growth despite the pandemic. The economic transformation of Vietnam is an ongoing process. The pathbreaking economic and political reforms under Doi Moi (Renovation period), launched in 1986, tiggered a rapid economic growth, transforming Viet Nam from one of the world’s poorest nations into a lower middle-income country. In 1986, Viet Nam’s total exports and imports stood at nearly US$3 billion and the trade deficit was estimated at US$1.5 billion. In 2019, the nation’s total trade value exceeded US$517 billion and the trade surplus reached US$11 billion. According to the World Bank, between 2002 and 2018, GDP per capita increased by 2.7 times, reaching over US$2,700 in 2019, and more than 45 million people were lifted out of poverty. Poverty rates declined sharply from over 70% to below 6%.
Against this backdrop, the economic and development partnership will be animated by India’s goal to become a US$5 trillion economy by 2024 and Vietnam’s ambition to become a high-income economy by 2045. This new phase of economic partnership will be underpinned by new technologies, innovation, and digitization to deliver good governance, people’s empowerment, and sustainable and inclusive development. Going forward, the two countries are expected to deepen cooperation in peaceful uses of nuclear and space technologies, transformative technologies in Information and Communication Technology, ocean sciences, sustainable agriculture, water resource management, holistic healthcare, vaccines and pharmaceuticals, smart cities and start-ups.
Looking ahead, the economic buoyancy of Vietnam will depend on the success with which it continues to manage the pandemic. In this regard, the visit of Chairman of Vietnam’s National Assembly to India is important as he has played a pivotal role in handling the pandemic. According to Mr Hue, the world is facing twin challenges – containing the COVID and tackling adverse impacts of climate change, which necessitates countries making institutional and governance reforms.
Vietnam has been prioritizing its resources and engaging all people to drastically fight the COVID-19 resurgence so as to fulfill its “twin goals” of keeping the virus at bay and reviving the economy, he said at a conference. He has called on all nations to work together and contribute their resources to revive multilateralism in order to win the battle against the coronavirus. In India, Mr Hue is expected to seek enhanced cooperation with India in combating the pandemic.
Vietnam has spent over $1.32 billion from the state budget on fighting the novel coronavirus. India, a trusted friend and partner, has sent oxygen and oxygen concentrators to help the Vietnamese people. Vietnam’s Ambassador to India Pham Sanh Chau has expressed gratitude to India for delivering COVID-19 relief amid a raging fourth wave of the pandemic in the country. “We will never forget this. A friend in need is a friend indeed,” he said.
The two sides are working towards forging reliable, efficient and resilient supply chains and are scaling up efforts to achieve the target of US$15 billion of bilateral trade.
Prime Minister Narendra Modi has aptly described Vietnam as “an important pillar of India’s Act East policy and an important ally of Indo-Pacific vision.” 2022 will be crucial year as India and Vietnam celebrate the golden jubilee of their diplomatic ties with year-long activities highlighting various facets of their mutually empowering partnership.
Underpinned by the “Joint Vision for Peace, Prosperity and People,” enunciated at the first-ever virtual summit between the prime ministers of India and Vietnam in December last year, India-Vietnam relations are set to scale new heights in days to come. Enhancing inter-parliamentary exchanges and people-to-people relations, as crystallized during the Speaker’s visit, will help to widen support for this mutually energising partnership.
(Manish Chand is Founder-CEO of India Writes Network, India and the World magazine and Centre for Global India Insights, a think tank focused on global affairs.)
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