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Monday 5 September 2016

India’s ties with Vietnam cannot be restricted merely to the strategic sphere for a truly meaningful relationship an expansion in economic ties is needed


http://www.dailypioneer.com/columnists/oped/lets-start-setting-up-shop-in-vietnam.html Monday, 05 September 2016 | Manish Vaid and Tridivesh Singh Maini India-Vietnam ties must not be limited to the strategic sphere. For a truly meaningful relationship, the gains made in the strategic relationship have to be matched by similar progress in the economic sphere, write Manish Vaid and Tridivesh Singh Maini Recent years have witnessed a deepening of ties between India and Vietnam. While robust foundations were laid by India’s first Prime Minister Jawaharlal Nehru and Vietnamese leader Ho Chi Minh in 1954, successive Governments sought to strengthen bilateral ties between the two countries, with the last decade having seen an acceleration of strategic and defence ties. Prime Minister Narendra Modi’s visit to Vietnam is important in this context. This trip has further expanded strategic and defence partnership between India and Vietnam. Some of the key issues on the agenda in this context are: The South China Sea factor: The verdict of The Hague’s Permanent Court of Arbitration on July 12, went against China, though India came up with a nuanced response. During Prime Minister Modi’s visit, the South China Sea issue was high on the agenda, given that India’s ONGC Videsh Limited (OVL) was given an extension by Vietnam (for the fourth time) for exploration rights in deepwater Block 128 for yet another year until June 27, 2017. India’s strategic gambit: Some of the specific items on the agenda include, sale of supersonic BrahMos missile, made under India-Russia joint venture to Vietnam after indecision since 2011, the negotiation of which is expected to be concluded by the end of this year. Second, the contract to supply patrolling boats for Vietnamese Coast Guards under a $100 million credit line was also signed during the Prime Minister’s visit. To support India’s strategic foothold in Vietnam, the latter has allowed India to activate its new satellite monitoring station at Ho Chi Minh City in southern Vietnam. The satellite is primarily meant for civilian use such as agricultural, scientific and environmental applications. This step will allow India a greater role in Southeast Asia, help the countries of the region. Focus on economics: While the China factor is definitely important for the bilateral relationship, it is also important that both the countries do not get bogged down. India must remember that China, in spite of its strained political relations with Vietnam, has a robust trade relationship with it. Bilateral trade between the India and Vietnam is around eight billion dollars and the leaders of both the countries have set a target of $15 billion dollars by 2020. On the other hand, the Sino-Vietnam trade reached $95.82 billion in 2015. The bilateral trade between China and countries of the Association of Southeast Asian Nations (Asean) reached $472 billion in 2015, which is over six times than that of India’s trade with Asean, registering at $76.53 billion during 2014-2015, which is now targeted to $200 billion by 2020. It is true that sections of the business community in Vietnam, as in many other countries, are beginning to explore other vistas and reduce their excessive dependence upon China — especially for sourcing raw materials. Modi’s Vietnam’s visit also focused on giving a strong thrust to economic and commercial ties which can double the current bilateral trade to $15 billion by 2020. Vietnam Prime Minister Nguyen Xuân Phúc, while hosting new Indian Ambassador Harish Parvathaneni in Hanoi on August 23, urged both the countries to step up cooperation in the fields of science, technology, finance, information technology and telecommunications. Just as India has broadened strategic ties with Vietnam, it should look out to take new strides for cooperation in the field of economics and energy. In case of energy cooperation, the letter of intent has already been signed between OVL and Petrovietnam during President Pranab Mukherjee’s visit to Vietnam in September 2014. This will consolidate energy cooperation between the two countries further. India should also look to increase the level of investments, which is currently estimated at one billion dollar that is way below the actual potential. Thus, to strive for sustainable partnership, India and Vietnam should have a long-term outlook into their trade relationship which is built upon their strategic intent while keeping the bigger picture in mind. Vietnam, while hosting the Asia-Pacific Economic Cooperation in 2017 should invite India to join the grouping in case there is a consensus to lift the moratorium imposed on new joining. In conclusion, India’s ties with Vietnam cannot be restricted merely to the strategic sphere for a truly meaningful relationship an expansion in economic ties is needed

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