INDIA-VIETNAM RELATIONS Study Materials

India-vietnam Relations

INDIA-VIETNAM RELATIONS

INTRODUCTION

• India and Vietnam, both with shared historical experiences in their struggle for independence, have long maintained strong and friendly bilateral ties. These relations are now recognized as a comprehensive strategic partnership by both nations. Rooted in their common fight for freedom from colonial rule, the traditionally warm and close bonds between India and Vietnam continue to thrive led people in their heroic struggle against colonialism in their respective countries.

• India was the Co-Chairman of the Commission for Supervision and Control formed pursuant to the Geneva Accord of 1954 to facilitate the peace process in Vietnam.

• Pandit Jawaharlal Nehru was one of the first visitors to Vietnam after its victory against the French in 1955. India initially maintained Consulate-level relations with the then North Vietnam (Democratic Republic of Vietnam) and South Vietnam and later established full diplomatic relations with unified Vietnam on 7 January 1972.

• Bilateral relations between the two countries were elevated to the level of ‘Strategic Partnership’ during the visit of Vietnam’s Prime Minister Mr. Nguyen Tan Dung to India in July 2007.

• In 2016, during Indian Prime Minister Mr. Narendra Modi’s visit to Vietnam, bilateral relations were further elevated to “Comprehensive Strategic Partnership”.

• The current development of India-Vietnam relations are guided by a “Joint Vision for Peace, Prosperity and People” adopted by Prime Minister Mr. Narendra Modi and the then Prime Minister Mr. Nguyen Xuan Phuc during the Virtual Summit held on 21 December 2020.

• In 2022-23, the two countries are celebrating the 50th anniversary of the establishment of diplomatic relations that also coincides with the 75th anniversary of India’s

independence “Aazadi Ka Amrit Mahotsav”.

In recent times, political contacts have strengthened, and trade and economic linkages continue to grow. India's 'Look East' policy and Vietnam's growing engagement within the region have paid dividends.

Vietnam is an important regional partner in South East Asia. 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 World Trade Organisation (WTO).

Economic Relations

India granted "Most Favoured Nation" status to Vietnam in 1975 and both nations signed a bilateral trade agreement in 1978 and the Bilateral Investment Promotion and Protection Agreement (BIPPA) on 8 March 1997.

The Indo-Vietnam Joint Business Council has worked to promote trade and investment since 1993.

In 2025-2026, India-Vietnam bilateral trade reached USD

16.4 billion, wherein, India’s export to Vietnam accounted to approx. USD 6.1 billion while Vietnam’s exports to India were approx. USD 10.3 billion.

Vietnam ranks 60th in FDI equity inflow into India during 2000-2025, with an FDI equity inflow of approximately USD 87 million.

Key items of exports from India to Vietnam include iron and steel, electrical machinery and equipment, machinery and mechanical appliances, auto components, meat and fishery products, cereal, maize, cotton, chemical and chemical products, ordinary metals, gems & jewellery, pharmaceuticals and ingredients as well as animal fodder & materials.

Key items of imports into India from Vietnam electronics and electrical goods, metals and articles of metals, chemicals, machinery and mechanical parts, articles of steel, plastic articles, coffee and tea, footwear, rubber articles, fertilizers and silk.

The bilateral institutional mechanisms for economic, trade, and investment promotion include the Joint Trade Sub-Commission, Joint Working Groups on Agriculture, Healthcare, Information Technology, and Science and Technology.

The 5th meeting of the Sub-Committee on Trade in 2023 reviewed bilateral trade and investment relations in New Delhi.

• The second Joint Working Group on Agriculture in 2023 explored cooperation in the agriculture and fishery sector, including facilitation of agriculture trade.The first Joint Working Group on Health Cooperation in 2021 discussed pandemic management, digital health, pharmaceutical cooperation, traditional medicine, medical tourism, and public health strategies.

• The 3rd meeting of the Joint Working Group Meeting on Information Technology in 2021 focused on sharing information and best practices on digital transformation, innovation, start-up ecosystems, cyber security, and capacity building activities.

Investment Cooperation

• Indian Investments in Vietnam are estimated at around USD 2 billion in 2023 including investments routed through third countries.

• According to Vietnam’s Foreign Investment Agency, India has 378 projects with the total investment capital of

1.07 billion in Vietnam.

• Major sectors of Indian sectors are energy, mineral processing, agro-processing (coffee, tea, sugar), IT, auto components, pharmaceuticals, hospitality and infrastructure.According to the Department for Promotion of Industry and Internal Trade of India, Vietnam has invested about USD 5.46 million in sectors like consumer goods, electronic, constructions, IT, pharmaceuticals etc.

Development Partnership

• India has a long-standing development partnership with Vietnam that has made positive contributions towards capacity building and socio-economic development of Vietnam.

• India has also been providing assistance to Vietnam within the ASEAN framework. Under the Mekong Ganga Cooperation (MGC) framework, India has been taking up Quick Impact Projects (QIPs), each valued at USD 50,000, in different provinces of Vietnam for development of community infrastructure.

With their short gestation period, the QIPs bring direct benefits to communities at the grassroots level. During the virtual summit between the Prime Minister of India and Vietnam on 21 December 2020, the number of QIPs project has been increased from 05 to 10 per year to be implemented annually in Vietnam.

So far, since 2017, 46 projects have been sanctioned in 39 provinces of Vietnam out of which 37 have already been completed and 9 are under implementation.

India has also completed technical assistance worth USD

2.25 million for conservation and restoration of ancient Cham monuments located in the Quang Nam Province of Vietnam, showcasing the deep civilizational connection between the two countries.

In September 2024, in view of devastation caused by Typhoon Yagi, GoI, under Operation Sadbhav, delivered 35 tons of emergency relief supplies to the Government of Vietnam in a gesture of support to communities.

Defence

India and Vietnam have been working on strengthening their defence and security cooperation since the signing of a Memorandum of Understanding on Defence Cooperation in 2009.

This partnership has been bolstered by periodic exchanges between the two countries' defence and security establishments.

The visit of India's Defence Minister in June 2022, further bolstered the cooperation, with the signing of a new Joint Vision Statement on India-Vietnam Defence

Partnership towards 2030 and a Memorandum of Understanding on Mutual Logistics Support.

In June 2023, Vietnam's Minister of National Defence visited India, where he held talks with India’s Defence Minister and called on India's President, Smt. Droupadi Murmu. The gifting of the indigenously built missile corvette INS Kirpan to Vietnam was announced during the visit, with the transfer planned for July 2023.

Vietnam-India Bilateral Army Exercise: VINBAX

Indian Community in Vietnam

Nearly 8,000 Indian nationals constitute the Indian community in Vietnam. About 5,500 of them are based in and around Ho Chi Minh City with another couple of thousand living in and around Hanoi.

Most of the community members are professionals employed in business and trading companies and sectors such as IT, hotels/restaurants, mining, yoga institutions, civil aviation and schools.

Indian businesses such as ONGC Videsh Limited, Bank of India, Bharat Electronics Limited, HCL Technologies and a few others have presence in Vietnam.

Other People-level exchanges

• Mahatma@150, under the "India for Humanity" initiative, has held artificial limb fitment programs in Vietnam's Vinh Phuc, Quang Ninh, and Yen Bai provinces in 2018.

• In December 2022, Bhagwan Mahaveer Viklang Sahayata Samiti (BMVSS) provided prostheses for 300 lower limb amputees at a seminar camp in Phu Yen Province.

• The Embassy and Consulate General of India, in partnership with local authorities, have organized the 9th International Day of Yoga celebrations in 35 locations in Vietnam in 2023, highlighting the country's popularity of yoga. The event aims to provide free prostheses to lower limb amputees.

Educational and training Exercises

• Vietnam is an important partner under Indian Technical and Economic Cooperation (ITEC) programme through short-term courses in Indian institutions to about

200 participants annually. Indian Council of Cultural Relations also offers nearly 50 scholarships to Vietnamese students and scholars every year and the offer of PhD fellowship programme for ASEAN countries has also received interest in Vietnam.

Science and Technology

• Agreements have been exchanged on agricultural research, and an Advanced Resource Centre in Information and Communications Technology (ARCICT) was inaugurated in Hanoi.

Assistance and Capacity Building

• India has provided Lines of Credit (LoCs) to Vietnam on concessional terms and conditions for development projects. Scholarships under the Indian Technical and Economic Cooperation (ITEC) program are offered to Vietnamese students. Assistance includes projects such as the establishment of an Indira Gandhi Hi-Tech Crime Laboratory.

Cultural Relations

• Cultural ties are fostered through events and festivals, such as the “Buddhist Festival – Days of India” organised in Vietnam. The Indian Business Chamber (INCHAM) is an organisation of Indians living in Vietnam, primarily to promote trade and business interactions.

Oil Exploration

• Oil exploration is a key area of cooperation between India and Vietnam. The two countries have signed many agreements in this area. This includes:

The Memorandum of Understanding (MoU) on Cooperation in Oil and Gas Exploration of 2007, and

The Joint Declaration on Comprehensive Strategic Partnership of 2016.

Under these agreements, India and Vietnam cooperate on a variety of oil exploration activities, including:

Joint exploration projects in the South China Sea

Exchange of technical expertise and personnel

Training of Vietnamese oil and gas professionals in India

Commercialization of Indian and Vietnamese oil and gas products and services

Many Indian companies are involved in oil exploration in Vietnam. These include ONGC Videsh, Essar Exploration, and Indian Oil Corporation.

The two countries are working together to develop a new type of floating production, storage, and offloading (FPSO) vessel.

Vietnam’s Importance for India

India's Act East Policy aims to strengthen its historical ties with Southeast and East Asia, with Vietnam being a key element.

India's growing economy requires energy resources, and Vietnam has abundant hydrocarbon reserves.

India's state-owned Oil and Natural Gas Corporation (ONGC Videsh) is actively searching for oil in disputed waters off Vietnam.

Vietnam is also a key part of India's "Necklace Diamonds Strategy," which aims to counter China's encirclement.

India is expanding naval bases and enhancing relations with strategically placed countries.

India’s significance to Vietnam

India could serve as a shield against regional dominance, particularly in Vietnam due to its territorial dispute with Beijing in the South China Sea.

India has conducted capacity-building programs for Vietnamese defence personnel, and thereare opportunities to increase trade between the two countries.

Indian companies can infuse capital and technology into the Vietnamese market, bringing it to par with East Asian counterparts. The relationship also has a strong cultural aspect, with Buddhism originating from India.

China Factor in bilateral ties

India and Vietnam's strategic calculus is heavily influenced by the China factor, as both have border issues with China and have fought wars with the country.

• As China continues to encroach on their territories, it is natural for both countries to seek restraint.

Areas for improvement

• India’s cultural presence in Vietnam is modest.

• Rarely are Indian films and television shows broadcast on television channels.

• Films depicting ancient traditions do not impact the youths and send mixed signals on India’s development.

WAY FORWARD

• India can strengthen ties with Hanoi and engage with other Southeast Asian states like the Philippines, maintaining strategic balance amid aggressive Chinese activities.

• Both countries should leverage economic opportunities left by anti-China sentiments and shifts in manufacturing firms.

• Negotiations for defense deals should be expedited, and Vietnam's open trade policy can be learned from, leading to a 240% growth in exports in the past eight years.

CONCLUSION

India must demonstrate greater commitment to Southeast Asia to strengthen its strategic position and signal its positive intentions by addressing the security issues faced by Southeast Asian states, demonstrating a desire for regional cooperation.