With global perception post COVID-19 not in favour of China, Indian business honchos are moving closer to Vietnam, a country known for its export oriented growth in the last three decades.
At the 27th edition of the CII Partnership Summit, held virtually on Tuesday, attended by close to 200 speakers from more than 40 countries, including 20 ministers from abroad, seven Indian ministers, 25 global CXOs and more than 100 heads of institutions, leaders and experts from around the world, this shift was evident.
The special country session was on Vietnam, and the consensus was that with a shared vision for economic prosperity and a strong history of trade ties, India’s economic relationship with Vietnam has made great strides over the past few years, and the business cooperation between the two countries is expected to further improve.
The bilateral ties have deepened through the years, with several high-level exchanges, that included visits of the Vietnamese president and prime minister to India in 2018. In December 2020, the prime ministers of both countries, in a virtual summit, set in motion the ‘India-Vietnam Joint Vision for Peace, Prosperity, and People’.
“Both India and Vietnam are home to rapidly growing markets that offer immense opportunities for enhancing bilateral trade and investment,” said one of the participants. India-Vietnam bilateral trade stood at over $10 billion in 2020, with India ranking eighth in the list of top exporting nations to Vietnam. India would not want to be dependent on China in the future for raw materials, and instead tap into countries like Vietnam, Bangladesh and even Taiwan, China’s arch rival.
The summit emphasised the importance of building supply chains, logistics and infrastructure connectivity for deeper regional integration.
“The heightened degree of volatility witnessed in the global trade environment has pushed businesses into diversifying their supply chains away from China, which has increased the importance of the India-Vietnam trade route for international business,” said an expert who participated in the panel discussion.
Accelerating MSME growth through global linkages, and expanding healthcare cooperation would be areas that the two countries would be working on. As a strong player in pharmaceutical manufacturing, India is a leading exporter to Vietnam. The sector is likely to see continuing growth in the future.
India and Vietnam has signed a MoU at the summit to promote exchange of knowledge, best practices and information and to explore new business opportunities in the field of solar energy with the aim to bridge the gap between Indian and Vietnamese solar companies.
The cooperation in disruptive technologies and digitisation was also discussed. On the digital payment front, India could share its experiences in creating an integrated, inter-operable system with a unified interface that could be hugely beneficial as it would also allow seamless transfer of funds across borders, incentivise innovations in payment systems and enable fin-tech companies to expand their scale and operations.
On the trade front, India can leverage digital cooperation mechanisms to engage through Digital Economic Partnership Agreements (DEPA) with Vietnam as this will help facilitate seamless, end-to-end digital trade, enable trusted data flows and build trusted digital systems. Through end-to-end digital trade, businesses can look forward to improved efficiencies and reduced costs.
“We are very optimistic. India and Vietnam are all set for the exponential growth in bilateral relationship, both in trade and tourism in the coming days,” Said Sanjay Budhia, co-chair, CII’s national committee on exports and MD, Patton group.