Daily News Analysis

India-Vietnam Relations

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Why in the News?

The recent state visit by the Prime Minister of Vietnam to India has strengthened bilateral ties and yielded several key outcomes.

Key Outcomes of the Visit

  • Plan of Action (2024-2028):
  • A comprehensive plan was announced to implement the Comprehensive Strategic Partnership between India and Vietnam.
  • Line of Credit:
  • India extended a US$ 300 million credit line to enhance Vietnam's maritime security capabilities.
  • Cultural Cooperation:
  • A Letter of Intent was signed to conserve and restore the "My Son" World Heritage Site temples, highlighting a commitment to cultural heritage.
  • MoUs Signed:
  • Agreements were established for cooperation in radio and television and for the development of the National Maritime Heritage Complex in Lothal, Gujarat.
  • Other Announcements:
  • Virtual inauguration of an Army Software Park in Nha Trang, Vietnam.
  • Vietnam's participation in the Coalition for Disaster Resilient Infrastructure (CDRI) was confirmed.

Historical Context

  • Support for Independence: India supported Vietnam's struggle for independence from France and opposed US involvement during the Vietnam War. India was one of the first countries to recognize a united Vietnam in 1975.

Strategic Partnership

  • Evolution of Ties: Bilateral relations were elevated to a Strategic Partnership in 2007 and further to a Comprehensive Strategic Partnership in 2016, guided by the Joint Vision for Peace, Prosperity and People 2020.

Economic Cooperation

  • Trade Volume: Bilateral trade reached US$ 14.82 billion in 2023-2024, with Vietnam being India’s 23rd-largest global trade partner and 5th largest among ASEAN countries.

Defence Cooperation

  • Multi-faceted Engagement: Defence cooperation includes dialogues, training exercises (like PASSEX, VINBAX, and MILAN), and capacity-building collaborations. In 2022, a Joint Vision Statement on Defence Partnership towards 2030 was signed, alongside a Memorandum of Understanding on Mutual Logistics Support.

Supply Chain Integration

  • Strategic Role: The partnership with Vietnam is crucial for India’s participation in building resilient regional and global supply chains, enhanced by Vietnam's Free Trade Agreement with the European Union.

Cultural Ties

  • Shared Heritage: India and Vietnam have over 2,000 years of cultural and civilizational ties, with a strong connection through their shared Buddhist heritage.

Significance of Vietnam for India

Geostrategic Location

  • Indo-Pacific Cruciality: Vietnam's position is vital for securing trade routes in the Indo-Pacific, enhancing regional stability.

Countering China

  • Shared Concerns: Both countries face challenges from China; India in Ladakh and Arunachal Pradesh, and Vietnam over claims in the Paracel and Spratly Islands.
  • Advocacy Against China: Vietnam is a strong advocate against China's unilateral actions in the South China Sea, aligning interests with India.

Energy Security

  • Hydrocarbon Investments: Indian investments in Vietnamese oil and gas exploration bolster energy security, ensuring a consistent supply of hydrocarbons.

Act East Policy

  • Core Partner: Vietnam is a key ally in India’s Act East policy and integral to India's broader Indo-Pacific vision.

Support on Global Platforms

  • UN Security Council: Vietnam actively supports India's bid for permanent membership in an expanded UN Security Council.

Challenges in India-Vietnam Relations

Balancing China

  • Cautious Approach: Vietnam’s apprehension of provoking China limits the depth of military ties with India, impacting joint security initiatives.

Modest Trade

  • Trade Volume Disparity: Despite increasing trade, it remains small compared to Vietnam's larger trade volumes with China and the U.S.

Trade Routing Issues

  • Supply Chain Dynamics: The rise in trade through Vietnam, partly due to Chinese firms rerouting supply chains, complicates India’s trade strategy.

Reluctance in Military Deals

  • Limited Military Purchases: Vietnam has hesitated to fully utilize India's line of credit for military purchases, avoiding some key acquisitions.

Cultural Gaps

  • Understanding Barriers: Differences in culture, customs, and language create challenges for deeper people-to-people connections.

Initiatives to Strengthen Relations

  • Mekong-Ganga Cooperation (MGC): This initiative fosters collaboration in tourism, culture, education, and transport among India and five ASEAN nations, including Vietnam.
  • Quick Impact Projects: Implemented in various Vietnamese provinces to promote immediate developmental benefits.
  • Capacity Building: India provides training and educational opportunities for Vietnamese nationals.
  • Defense Cooperation: India delivered the indigenously built missile corvette INS KIRPAN to Vietnam in 2023, enhancing maritime capabilities.

Way Forward

Enhancing Economic Cooperation

  • Joint Ventures: Promote collaborative economic initiatives, boost digital and physical connectivity, and enhance market access for both nations.

Bridging Connectivity Gaps

  • Trilateral Highway: Development of the India-Myanmar-Thailand trilateral highway can improve links to Vietnam's Da Nang port.

Deepening Cultural Cooperation

  • Strengthening Exchanges: Increase people-to-people interactions to leverage existing goodwill and cultural ties.

Realizing Converging Interests

  • Indo-Pacific Strategy: Both nations are positioned strategically within the Indo-Pacific, and their cooperation will be crucial in shaping the region's geopolitical landscape amidst growing global competition.

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