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INDIA-VIETNAM TRADE AND ECONOMIC COOPERATION

Bilateral Trade

From a meagre US$200 million in the year 2000, bilateral trade between India and Vietnam has seen steady growth over the years. According to Indian statistics, during the calendar year 2020, bilateral trade between India and Vietnam reached US$10.04 billion, with Indian exports to Vietnam amounting to US$ 4.49 billion, while Indian imports from Vietnam at US$ 5.55 billion. This marked a decrease of 22.47 percent in bilateral trade year-on-year, largely on account of COVID-19 related disruptions. During the same period, India’s trade deficit with Vietnam reduced from US$ 1.93 billion in 2019 to US$ 1.06 billion in 2020. Major Indian exports that registered positive growth during 2020 were iron and steel, pharmaceutical, plastics, oilseed and cotton. In 2020, for India, Vietnam was the 17th largest trading partner globally and the 4th largest within ASEAN, following Singapore, Indonesia and Malaysia. For Vietnam, on the other hand, India was the 10th largest trading partner in 2020. During 2020, key items of exports from India to Vietnam included iron and steel, meat and fishery products, cotton, pharmaceuticals, auto components and machinery. Key items of imports into India from Vietnam in 2020 included electrical equipment including mobile phones, machinery and equipment, chemicals, copper articles, coffee, and iron and steel.

Profile of India’s bilateral trade with Vietnam over the last few years is shown below.

India’s Investments in Vietnam

India’s investments in Vietnam are estimated at around US$ 1.9 billion including investments routed through third countries. According to Vietnam’s Foreign Investment Agency, India has 294 valid projects with a total invested capital of US$ 898.65 million as of December 2020, ranking 26th among countries and territories investing in Vietnam. Major sectors of investment are energy, mineral exploration, agro-processing, sugar, tea, coffee manufacturing, agro-chemicals, IT and auto components.

Vietnam’s Investments in India

As of 2020, Vietnam has six investment projects in India with an estimated investment of US$ 28.55 million, primarily in the areas of pharmaceuticals, information technology, chemicals and building materials.

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 US$50,000, in different provinces of Vietnam for development of community infrastructure. With their short gestation period, the QIPs bring direct benefits to communities at the grassroots level. So far, since 2017, 13 QIPs have been completed in 12 provinces of Vietnam, while 13 new projects are under implementation during the year 2020-21 in 10 provinces. In addition, 7 grant-in-aid assistance projects for the benefit of the Cham community in Ninh Thuan province were completed in December 2020 with an outlay of around US$ 1.54 million. India is also providing technical assistance worth US$ 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.

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