Vietnam-India Strengthen Partnership, Trade on Sidelines of Parliament Speaker Visit
Vietnam Briefing overviews the India-Vietnam bilateral relationship on the sidelines of a visit by India’s Speaker of the lower house of Parliament. We explore the strengthening of economic ties between both countries despite the pandemic and the resumption of direct flights.
India’s Speaker of the Lok Sabha (lower house of Parliament) Om Birla visited Vietnam on a three-day tour from April 19 to 21 on generating business ties and strengthening the India-Vietnam bilateral relationship.
Vietnam and India are celebrating 50 years of close ties in 2022 and Birla’s visit is the latest after Vietnam’s National Assembly (NA) Chairman Vuong Dinh Hue visited India in December 2021. Vietnam and India established diplomatic relations in 1972.
Strengthening trade and investment
Two-way trade between Vietnam and India was at US$13.2 billion despite the pandemic representing year-on-year growth of 37 percent.
The two sides looked to continue to build on their bilateral relationship including areas related to security, culture, tourism, education and training, supply chains, digital transformation, energy transformation, climate change, maritime and oil and gas cooperation. Birla also wants trade between both countries to reach US$15 billion in the short term from the previous US$13.2 billion in 2021.
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India ranks 24 out of 141 countries investing in Vietnam with approximately US$1 billion in investments consisting of 317 projects as of March 2022.
As per a survey named Borderless Business by Standard Chartered, Indian companies that want to expand in the ASEAN region are optimistic about Vietnam along with Indonesia, Malaysia, and Singapore. Indian businesses are expected to increase investment in part due to the Regional Comprehensive Economic Partnership (RCEP), which was recently implemented.
Bilateral ties further enhanced
Vietnam remains an important country in India’s Act Easy policy. In light of this, the two countries jointly implemented the 2021-2023 Action Program which aims to develop bilateral ties further and more effectively. Birla also stated that India established the Friendship Parliamentary Group with the National Assembly of Vietnam to enhance cooperation between the Indian Parliament and Vietnam’s National Assembly.
Geopolitically, Vietnam has also backed India to become a permanent member of the UN Security Council (UNSC) as well as join the Asia-Pacific Economic Cooperation (APEC). Both India and Vietnam share concerns about China and reiterated the importance of freedom of movement and security in the South China Sea.
Direct flights resumed
One of the highlights of Birla’s visit was inaugurating the restoration of direct flights between Vietnam and India. Vietnam’s low-cost carrier VietJet Air operated directed flights between New Delhi and Hanoi and Ho Chi Minh City before the pandemic; these were suspended due to the pandemic but will resume on April 29 and 30. In addition, four new routes are being planned between Hanoi-Mumbai, Ho Chi Minh City-Mumbai as well as island of Phu Quoc, popular with tourists, with New Delhi and Mumbai. These routes are expected to begin operations from June gradually.