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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 Financial Year (FY) April 2020 – March 2021, bilateral trade between India and Vietnam reached US$11.12 billion, with Indian exports to Vietnam amounting to US$ 4.99 billion and Indian imports from Vietnam at US$ 6.12 billion. This marked a decrease of 22.47 percent in bilateral trade year-on-year, largely on account of COVID-19 related disruptions. India’s trade deficit with Vietnam reduced from US$ 2.22 billion during FY 2019-2020 to US$ 1.12 billion in FY 2020-2021. In FY 2020-21, for India, Vietnam was the 15th 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 globally. During FY 2020-2021, key items of exports from India to Vietnam included iron and steel, cotton, frozen meat, auto component, seafood, electrical machinery and equipment, animal feeds and cereals. Major Indian exports that registered positive growth during this period were cotton, auto component, electrical equipment, animal feed ingredient, cereals and pharmaceutical products.Key items of imports into India from Vietnam during this period were electrical machinery and equipment, chemicals, copper and articles of copper, products of iron and steel and agro-based commodities.

Bilateral trade profile for 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, as of April 2021, India has 299 valid projects with total invested capital of US$ 909.5 million, ranking 26th among countries and territories investing in Vietnam. Major sectors of Indian 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 total 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, Sustainable Development Goals 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$50,000, in different provinces of Vietnam for development of community infrastructure. With their short gestation period, the QIPs bring direct benefits to communities at the grassroots level. So far, since 2017, 18 QIPs have been completed in 17 provinces of Vietnam, while 8 new projects are under implementation during the period 2020-21 in 5 provinces. In addition, 7 grant-in-aid assistance projects for the benefit of the Cham community in NinhThuan province were completed in December 2020 with an outlay of around US$ 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.