Goods exchanges between Vietnam and India boasted reliable year-on-year increases over the 2006–2012 period, resulting in total bilateral trade almost quadrupling 2006’s $US1.018 billion and hitting US$3.943 billion in 2012.
India sees Vietnam as essential to its “Look East” Policy’s aims of penetrating other ASEAN member markets.
Vietnamese-Indian relations have grown steadily in various fields on a bilateral, regional, and global basis.
The Ministry of Industry and Trade’s (MoIT) African, West Asian, and South Asian Market Department predicts the two countries’ ties will capitalise on the firm foundations already existent and help realise the Vietnam-India strategic partnership established by senior leaders in 2007.
Trade turnover sees year-on-year increase
The Vietnam General Department of Customs reported Vietnamese exports to India were valued at US$1.782 billion in 2012, up 14.7 percent over 2011 (US$1.553 billion). Imports from India totaled US$2.161 billion, down 7.9 percent.
Although Vietnam maintained its import surplus during the reviewed period, the balance of trade deficit was US$379 million in 2012—down nearly half from a year earlier and accounting for 21.26 percent of export value. In 2006, the trade deficit was 4.5 times higher than export value.
The result is attributable to the ASEAN-India Trade in Goods Agreements (AITIG), signed in the Thai capital Bangkok by ASEAN and Indian Ministers in 2009 and entering effect from June 1, 2010.
Since the AITIG came into force, Vietnam’s export value has surged, assisted by a focus on products with a high export growth such as rubber (an increase of 641 percent) and telephones and components (an increase of 448.57 percent).
Rubber and products made from rubber are a jewel in Vietnamese exports to India with total export turnover reaching US$ 211.57 million, up 93.74 percent on 2011 (US$109.20 million).
Other items earning high export turnovers include telephones and components (US$469 million); machinery, equipment and spare parts (US$238 million); computers and electronics (US$159 million); and coffee (US$58 million). These five commodity groups account for 64.5 percent of the country’s total Indian export turnover.
Fifteen out of 33 imported Indian commodities also recorded growth in turnovers. Maize, fertilizer and chemicals posted the highest with 128 percent, 34 percent, and 30 percent, respectively.
Vietnamese mainly imports Indian products ranging from corn (US$330 million) and animal feeds and materials (US$285 million) to pharmaceuticals (US$236 million) and cotton (US$11 million).
Attractive destination for Indian businesses
The African, West Asian, and South Asian Market Department says Vietnam is emerging as an attractive destination for Indian investors. In 2012 alone, India launched an additional 10 projects in Vietnam with a total registered capital of US$19.35 million. India ranked 22nd out of Vietnam’s 55 foreign country and territory investors.
The total investment capitalisation of Indian projects in Vietnam hit US$252.35 million at the end of 2012.
Direct Indian investment in Vietnam primarily focuses on industrial sectors, services, and agricultural product processing. Typical projects include the instant coffee plant in DakLak, the black coal powder plant in Vung Tau, and the animal feed processing plant in Tay Ninh.
Last year saw many Indian business delegations visiting Vietnam in the hopes of finding partners and promising business opportunities. Meanwhile, Vietnamese businesses have intensified their own India-based trade promotion activities.