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All India Radio – PM’s Vietnam Visit- Strengthening Ties

  • October 8, 2016
  • 2
All India Radio
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PM’s Vietnam Visit- Strengthening Ties

 

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Background

  • Cordial and friendly relations between India and Vietnam with foundation going back 50 years through PM Nehru and President Ho Chi Minh.
  • In recent times, political contacts have strengthened as reflected in several high-level visits by leaders from both sides.
  • India’s thrust under the ‘Act East’ policy combined with Vietnam’s growing engagement within the region and with India has paid rich dividends.
  • India and Vietnam closely cooperate in various regional forums such as ASEAN, East Asia Summit, Mekong Ganga Cooperation, Asia Europe Meeting (ASEM) besides UN and WTO.
  • Vietnam is also an important pillar amongst India’s CLMV partners.

PM’s visit to Vietnam in normal course should be seen as a bilateral visit but it has added significance if seen in light of India’s Act East Policy which has gained new momentum. The significance of the meeting can be gauged from PM’s statement made in Hanoi which described Vietnam as an important pillar in India’s Act East policy.

In 2014, PM formally inaugurated India’s Act east policy. From 2015 to 2018, Vietnam is the ASEAN Coordinator for India. Thus, ASEAN’s linking with India makes Vietnam very important destination for India. India has signed a billion dollar agreement to build a physical connectivity with ASEAN, for example travelling by train from New Delhi to Hanoi. Thus, Vietnam is a special partner of India.

  1. In Act East, it is a move beyond simple political and economic relation to strategic and defence cooperation relationship. In that sense, Vietnam is emerging as a defence coproduction partner and country where India can export defence equipment.
  2. Unlike most of ASEAN countries which have good economic relationship with India, trade with Vietnam has increased at much faster rate, about 26% increase annually.

Bilateral relations

  • 12 MoUs have been signed between two countries and it ranges from defence to health. Thus it signifies to which direction the bilateral relation is moving.
  • Historical relation with Vietnam and now expanding from economics to defence cooperation, building of petro boards together are important symbolism as to how India seeks to showcase their strengthening partnership in the backdrop of controversial SCS issue.
  • It is meant to signal India’s growing significant strategic presence south East Asia as continuation of India’s Act east policy.
  • 500 million dollar defence credit line has been opened where India would be assisting Vietnam particularly in upgrading their defence establishment.

India is building an expanding all round relationship with Vietnam. The upsurge in the relation is relatively recent where focus has been on defence cooperation and counter terrorism.

Trading partners

  • India is not the most important country for Vietnam right now but as a signal to Chinese, Vietnam is growing ties with India on economic front. China-Vietnam trade and investment is 10 times India-Vietnam trade. Major counties like Japan have USD30 billion investment and USD28 billion trade annually whereas South Korea is also a major trading partner.
  • Both India and Vietnam are looking their national interests carefully, assessing the advantages and engaging in mutual benefit areas.
  • Economic trade target of USD15 billion has been set between India and Vietnam to be achieved by 2020. This holds the key for economic cooperation in coming years.
  • The trade is biased in favour of India for about USD2.8 billion. Thus, India has to fundamentally create avenues and encourage Vietnamese exports to India and investments through Make in India.
  • If the bilateral trade balance exists, then there is more chance of increasing the trade by 2020.

Culture

Both countries share Buddhist faith. PM’s visit to Quan Su pagoda holds a great significance. When the PM invited the Vietnamese to visit Buddhist circuit in India, it comes out as a clever step to mix diplomacy with economy and culture too and underlines PM’s two important elements of foreign policy—Diaspora and Cultural linkages.

India has strong link of Buddhism with some of East Asian countries, esp. Vietnam. Hence, it can create cushion at times of difficult situation and create goodwill in societies.

Conclusion

Look east policy is decade old but last two years have seen greater focus in this area. Thus, aptly called Act east policy. The Act East Policy aims to forge partnerships with India’s eastern neighbours to encompass security, strategic, political, counter-terrorism, and defence collaboration in addition to economic ties.

PM’s visit has come at a time when south East Asia is grappling with a situation created by a judgement of international tribunal on South China Sea. India has taken a principled stance on the South China Sea issue and Vietnam has also lauded India’s principled position. The significance of scheduling PM’s visits to the three Asian countries cannot be missed as Vietnam was the first destination before he reached China because of differences of similar kinds that both India and Vietnam have with China.

India values Vietnam as an old friend and both are committed to strengthen their bilateral relationship within the India-ASEAN and Mekong-Ganga Cooperation framework.

The year 2017 would mark a significant milestone as India and Vietnam would celebrate the 45th anniversary of establishment of diplomatic relations and 10 years of strategic partnership.

Connecting the dots

  • India and Vietnam have a potential to upgrade their relationship to more strategic partnership owing to ‘ever-looming neighbour threat’. In that context, examine the importance of India-Vietnam relations.

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