India-Vietnam Enhance Comprehensive Strategic Partnership | 03 Aug 2024

Source: BL

Why in News?

India and Vietnam have unveiled a new plan aimed at bolstering their bilateral ‘comprehensive strategic partnership’ over the next five years.

• This initiative was discussed during a bilateral meeting between the Indian Prime Minister and Vietnamese Prime Minister Pham Minh Chinh in New Delhi.
• The agreement signifies a deepening of ties between the two nations, with a focus on various sectors including trade, digital payments, and defence.

What are the Key Highlights of the Bilateral Meeting?

• New Plan of Action: India and Vietnam agreed on a new plan of action for their comprehensive strategic partnership established in 2016, which will be implemented over the next five years (2024-2028).
  • Objectives of the plan include strengthening bilateral trade and economic cooperation. Enhancing collaboration in technology and development, and fostering partnerships in defence and security.
• Digital Payment Connectivity: The PM of India announced that the central banks of both countries reached an agreement to establish digital payment connectivity, enhancing financial transactions between the two nations.
  • Like India, Vietnam is also embracing digital payments, including developing cross-border payment connectivity for retail transactions with other ASEAN countries.
• Credit Line Extension: India will extend a USD 300 million credit line to Vietnam to support its military security and development projects.
  • The inauguration of an Army Software Park in Nayachang, funded by an Indian grant, and increased cooperation on terrorism and cyber security were highlighted.
• MoUs Signed: Six Memorandums of Understanding (MoUs) were signed, covering various areas including Agricultural Research, Customs capacity building, Law and justice, Radio & television, and Traditional medicines.
• Trade and Economic Goals: Vietnam proposed raising annual bilateral trade to USD 20 billion from the current USD 14.8 billion.
  • The two countries agreed to expedite the review of the ASEAN-India Trade in Goods Agreement to enhance trade.
  • Vietnam welcomed Indian investments in IT, manufacturing, textiles, semiconductors, and renewable energy.
• Strategic Alignment: Both countries committed to strengthening cooperation in the Indo-Pacific region, focusing on maintaining freedom of navigation and overflight in the South China Sea.
  • They emphasised the peaceful settlement of disputes based on international law, particularly the United Nations Convention on the Law of the Sea (UNCLOS) of 1982.
• Economic Diplomacy Dialogue: A new economic diplomacy dialogue will be established at the deputy foreign minister level to address trade and investment issues.

How has been the India-Vietnam Relations?

• Historical Ties and Diplomatic Relations: India and Vietnam enjoy a Comprehensive Strategic Partnership.
  • Mahatma Gandhi and President Ho Chi Minh exchanged messages during their independence struggles.
  • India established diplomatic relations with Vietnam in 1972. Relations were elevated to a Comprehensive Strategic Partnership in 2016.
  • The development of India-Vietnam relations are currently guided by a "Joint Vision for Peace, Prosperity and People" adopted in 2020.
  • In 2022, the two countries celebrated the 50th anniversary of the establishment of diplomatic relations and both countries are working together actively to further strengthen their multi-dimensional cooperation.
• Institutional Mechanisms:
  • The 18th Joint Commission Meeting (JCM) on Economic, Trade, Scientific, and Technological Cooperation was held on 16th October 2023 in Hanoi.
    • Previous JCM meetings, Foreign Office Consultations, and Strategic Dialogues at Secretary-level help review bilateral cooperation.
• Trade, Economic, and Development Cooperation:
  • Trade Statistics: India-Vietnam trade from April 2023 to March 2024 was USD 14.82 billion.
    • India's exports to Vietnam were USD 5.47 billion, and imports were USD 9.35 billion.
    • The ASEAN-India Trade in Goods Agreement concluded in 2009 provides a preferential trade regime between India and Vietnam and that Agreement is currently under review.
  • Key Exports and Imports:
    • India exports engineering goods, agricultural products, chemicals, pharmaceuticals, electronic goods, minerals, textiles, and plastics to Vietnam.
    • Imports from Vietnam include computer and electronic goods, mobile phones, machinery, steel, chemicals, footwear, garments, and wooden products.
  • Investments: Indian investments in Vietnam are around USD 2 billion, including energy, mineral processing, agro-processing, IT, auto components, pharmaceuticals, hospitality, and infrastructure sectors.
    • Vietnam's investments in India are about USD 28.55 million, primarily in consumer goods, electronics, construction, IT, and pharmaceuticals.
• Development Partnership: Under the Mekong-Ganga Cooperation framework, India has completed about 45 Quick Impact Projects in over 35 provinces of VietNam, with another 10 projects at the implementation stage.
  • Mekong-Ganga Cooperation (MGC) established in 2000, includes six member countries: Cambodia, Lao PDR, Myanmar, Thailand, VietNam, and India.
  • The cooperation focuses on key sectors: tourism, culture, education, information technology, telecommunications, and transport.
  • India has supported the conservation and restoration of the UNESCO World Heritage site of 'My Son' in Quang Nam Province, Central Vietnam.
    • The Archaeological Survey of India completed the conservation and restoration of A, H and K group of temples at the My Son complex site in 2022.
• Defence Cooperation: India and Vietnam have a strong defence and security cooperation, with a 2009 MoU on Defence Cooperation and a 2015 Joint Vision on Defence Cooperation providing the framework.
  • In 2022, the two countries signed a new "Joint Vision Statement on India-Vietnam Defence Partnership towards 2030" and a "Memorandum of Understanding on Mutual Logistics Support".
  • In 2023, Vietnam was gifted an indigenously built missile corvette INS Kirpan.
  • Bilateral military-to-military cooperation includes staff talks, exercises, training, visits, and exchanges.
    • VINBAX-2023 Military Exercise.
    • In February 2024, a Vietnamese navy ship participated in the MILAN international maritime exercise in India.
• Cultural Exchanges: MoUs between Indian and Vietnamese institutions promote academic and cultural exchanges.
  • Conferences and summits like the Northeast India Festival in Ho Chi Minh City foster bilateral cultural ties.
  • Buddhist links between Vietnam and India represent ancient civilisational connections. Vietnamese Buddhist scholars and pilgrims regularly travel to India, including to the Vietnamese Buddhist pagoda in Bodhgaya.
  • Yoga is immensely popular across Vietnam, with hundreds of yoga clubs and numerous Indian yoga teachers offering their services.
  • The Swami Vivekananda Indian Cultural Centre in Hanoi promotes further understanding of India and fosters closer links between the two countries through various cultural programs and activities.

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