India, Vietnam Relations | Current Affairs & Hindu Analysis: Daily, Weekly & Monthly - UPSC PDF Download

Key Highlights of the India-Vietnam Bilateral Meeting

New Action Plan:

• India and Vietnam have introduced a new five-year plan to enhance their "Comprehensive Strategic Partnership," first established in 2016.
• This plan, covering the years 2024 to 2028, emphasizes initiatives such as digital payment connectivity and the expedited review of the ASEAN-India Trade in Goods Agreement.

Agreements and Financial Support:

• The countries signed six MoUs related to agriculture, customs capacity building, law, justice, media, and traditional medicines. India extended two lines of credit to Vietnam, totaling USD 300 million.

Trade and Digital Payments:

• Trade between the two nations has increased by 85% in the past decade.
• Vietnam proposed a new bilateral trade target of USD 20 billion, up from the current USD 14.8 billion.
• The leaders also agreed to establish digital payment connectivity to enable cross-border transactions via QR codes and instant payments.

Defence and Security:

• The meeting emphasized defense and security cooperation, including a new Army Software Park in Nayachang, funded by India. Bilateral efforts will also extend to counter-terrorism and cybersecurity.

Temple Conservation:

• Both governments signed a letter of intent to restore and conserve ancient Shiva temples in My Son, Quang Nam province.

Indo-Pacific Vision:

• India and Vietnam reiterated their commitment to a free, open, and rules-based Indo-Pacific region. Vietnam continues to play a key role in India's Act East Policy, with India supporting regional development and security over expansionism.

Current Status of India-Vietnam Relations

Historical and Diplomatic Ties:

• India and Vietnam have a long history of friendly relations, dating back to Mahatma Gandhi and President Ho Chi Minh’s exchanges during their independence movements. Diplomatic ties were established in 1972 and upgraded to a Comprehensive Strategic Partnership in 2016. The "Joint Vision for Peace, Prosperity, and People," adopted in 2020, guides the current relationship.

Economic Cooperation:

• Indian companies such as ONGC Videsh and Bharat Electronics are present in Vietnam.
• Between April 2023 and March 2024, bilateral trade reached USD 14.82 billion.
• India’s exports include engineering goods, agricultural products, chemicals, and pharmaceuticals.
• India's imports from Vietnam primarily consist of electronics, machinery, textiles, and footwear.
• Indian investments in Vietnam stand at USD 2 billion.
• Vietnam has invested around USD 28.55 million in India.

Development Partnership:

• Under the Mekong-Ganga Cooperation (MGC) framework, India has completed 45 Quick Impact Projects across more than 35 Vietnamese provinces. India has also helped restore the UNESCO World Heritage site "My Son" in Vietnam.
• Defence and Security Relations:
  India and Vietnam maintain strong defense ties, with MoUs on defense cooperation dating back to 2009. Recent military collaborations include a joint vision statement on defense cooperation and various military exercises, such as VINBAX-2023. Vietnam received India’s INS Kirpan missile corvette in 2023.

Cultural Exchange:

• Cultural exchanges between the two nations are vibrant, facilitated by MoUs between academic institutions.
• Popular events, such as the Northeast India Festival in Vietnam, and the growing popularity of yoga in Vietnam, further strengthen ties.

Challenges in India-Vietnam Relations

Trade Imbalance:

• India faces an unfavorable trade balance due to its higher imports from Vietnam. Addressing trade imbalances and improving market access are key challenges for both countries.

Geopolitical Tensions:

• Tensions in the Indo-Pacific region, particularly China's assertiveness in the South China Sea, pose a challenge to India-Vietnam relations. Both countries need to navigate these geopolitical tensions with careful diplomacy.

Infrastructure Constraints:

• Infrastructural and logistical challenges, such as inadequate port facilities and limited connectivity, hinder the smooth flow of trade and investment between the two nations.

Defense Cooperation Complexities:

• Despite strong defense ties, challenges remain related to defense procurement, technology transfer, and strategic alignment. Both nations must address these complexities to enhance their defense cooperation effectively.

Way Forward

• Strategic Partnership: Continue expanding cooperation across key areas such as defense, security, and regional stability.
• Defense and Security: Increase joint exercises, training programs, and technology exchanges, with a focus on areas like maritime security and counter-terrorism.
• Trade Growth: Work towards achieving the proposed bilateral trade target of USD 20 billion, while reducing trade barriers and enhancing cooperation in technology, energy, and pharmaceuticals.
• Investment: Promote investments in high-impact sectors such as infrastructure, energy, and technology.
• Mekong-Ganga Cooperation: Support regional development through impactful projects under the Mekong-Ganga Cooperation framework.
• Indo-Pacific Vision: Collaborate on maintaining a free and open Indo-Pacific region while addressing regional security and economic integration.
• Technology Transfer: Foster collaboration in emerging technologies such as artificial intelligence, renewable energy, and digital infrastructure.