By TN Ashok / Diplomatic Editor
New Delhi, October 26 : Vietnam Prime Minister Nguyen Tan Dung begins his two-day state visit to India Monday, by first touching down at Bodh Gaya in Bihar, then proceeding to the capital to signify the 3rd highest level exchanges between the two countries.
Dung is accompanied by a 50-member business delegation as his visit is being equated with maximising efforts to foster greater economic engagement between the two nations.
Dung begins his official engagements in India Tuesday by first holding talks with Prime Minister Narendra Modi at Hyderabad House followed by signing of agreements including one on sister city ties between Ho Chi Minh City and Mumbai, and another one on Bank of India to open its first branch in Ho Chi Minh City.
Dung’s visit comes just a month after that of President Pranab Mukherjee to Vietnam, during which the two sides inked seven pacts, including between ONGC Videsh Limited (OVL) and Vietnam Oil and Gas Group (PetroVietnam) for further cooperation in the hydrocarbons sector. PetroVietnam has offered new blocks to OVL for oil and gas exploration and production, which are under consideration.
Both sides had also inked US $100 million Line of Credit defence MoU for procurement of defence equipment from India during the visit. During Dung’s visit the sale of Brahmos supersonic cruise missiles, which are co-developed with Russia, to Vietnam are likely to be discussed. India had last year offered four patrol vessels to Vietnam as part of the LoC, which is yet to be finalized.
The Vietnam PM’s visit comes close on the heels of the civil aviation pact under which daily direct flights will be launched between the two countries, with Jet Airways launching flights on Nov 5 between Mumbai, Delhi and Ho Chi Minh city, while Vietnam Airlines starts flights between Hanoi and New Delhi in 2015 under a code share agreement with Jet Airways. The direct flights are expected to give boost economic ties besides boost people-to-people relations between the two countries promoting tourism. .
External Affairs Sushma Swaraj visited Vietnam August end when she met the Vietnamese leadership as part of the Modi government’s outreach programme on the Look East policy.
During 2013-14, trade between the two countries stood at US $8 billion, registering a growth of over 30 percent over the previous year.
Both sides have identified certain key areas to boost trade, including textiles, chemicals and agro chemicals, machinery, leather and footwear and in finance, tourism and IT.
The visit is important because much significance is being attached to 2015 when Vietnam will be the country coordinator for India in the ASEAN which will provide greater possibilities for deeper engagement with the regional bloc, the ministry of external affairs had said.
Vietnam currently has tensions with China over the South China Sea and it asked India to help maintain maritime safety and security and in settlement of territorial disputes in the disputed South and East China Seas during Sushma Swaraj’s Hanoi. visit.
India has proposed to use Dung’s visit to focus entirely on economics and commerce as Vietnam is keen to diversify its economic base. “This provides a window of opportunity for both the countries to expand and diversify this economic engagement”, Sanjay Bhattacharya, joint Secretary, (South), Minister of External Affairs told newsmen recently.
Prime Minister Dung is accompanied by a 50-strong business delegation which will have Business Forum meetings conducted by CII, FICCI and ASSOCHAM on the 27th. “While there is strong on-going cooperation in the oil exploration sector, we wish to see much closer cooperation in other areas”, Bhattacharya said.
Bhattacharya said that India would like to engage with Vietnam in the field of textiles and chemicals including in dies and agrochemicals, in machinery , leather and footwear, and also in services such as finance, tourism and IT. These are some of the focal areas that we have already exchanged notes on and agreed that will be the items of discussion when our business sectors get together on the 27th.
The Bank of India is working in Vietnam for some time now and its expected to upgrade its presence to a full Branch status very soon. Jet Airways is going to start flights on the 5th of November between Mumbai, Delhi and Ho Chi Minh city. And Vietnam Airlines is going to start flights between Vietnam, particularly Hanoi and New Delhi in 2015.
Indian companies recognise that as ASEAN integrates and we move towards the ASEAN Economic Community – and let us not forget that Vietnam is negotiating the TPP which will bring them closer in harmony with the Pacific partnership – those Indian companies that establish a presence in Vietnam will actually have a huge advantage in this new integrated Asia and also in the Pacific partnership, he said.
Referring to Infrastructure, Bhattacharya said, Tata Energy’s has bagged big project. Tata Power had succeeded in its bid for a thermal power plant which is 660×2 MW. And there are others who are looking at other energy projects. We have recently concluded an agreement for the 30-year management of the Ha Long-Hai Phong highway. Hai Phong as you know is a major port of Vietnam. And a 30-year commitment shows the interest to have a long-term presence in Vietnam, and this is something that the Vietnamese business appreciates very well, he said.
India is also looking at other BOT and PPP projects. Vietnam has recently launched these initiatives in many of our companies. Particularly many Singapore-based Indian companies are looking at these opportunities. Vietnam has set up a number of industrial parks which are either industry specific or country specific, and our business is looking at some of these opportunities as well, the Joint Secretary said.
India’s ties with Vietnam are robust and growing. Trade with Vietnam din 2013-14 was about USD 8 billion, a growth of over 30 per cent over the previous year. Indian exports to Vietnam are about USD 5.4 billion, and imports USD 2.6 billion. India has set a target of USD 7 billion bilateral trade to be achieved by 2015, which we have exceeded well in advance.
Investment by Indian companies in Vietnam total approximately USD 1 billion. These include investments in agrochemicals, in IT, in oil and gas, mineral exploration and agricultural processing. India has extended 18 LoCs to Vietnam covering about 90 plus projects. We offer 150 ITEC scholarships and 40 other scholarships every year to Vietnam. We have also set up a number of capacity-building institutions in IT, in English language training, in vocational training, and in entrepreneurial development.
Backgrounder on India Vietnam Relations
India and Vietnam relations have been characterised by high-level exchange of visits. This is the Vietnamese Prime Minister’s third visit to India. He was previously here in 2007 and in 2012.
During his visit in 2007, a Joint Declaration on Strategic Partnership with Vietnam was issued. In 2012 he came here as part of the India-ASEAN Commemorative Summit in New Delhi. Indian President Pranab Mukherjee visited Vietnam last month. Earlier, the General Secretary of Vietnamese Communist Party visited India last year. The visit of the Vietnamese Prime Minister comes in the context of a long tradition of exchange of high-level visits.
India and Vietnam have excellent cooperation in international fora. Vietnam has supported India’s permanent membership in an expanded UN Security Council. Cultural linkages form an important aspect. Reflecting this cultural linkage the Vietnamese Prime Minister will first travel to Bodh Gaya before he comes to Delhi. Possibilities for a Archaeological Survey of India helping in restoration of conservation of some Cham monuments in My Son are being discussed. An Indian cultural centre is also being planned to be opened in Hanoi. Possibilities of exchange of cultural content or content for Vietnamese TV stations is also under discussion.
Vietnam will also be the country coordinator for India in the ASEAN starting from 2015, and this is one other aspect of a growing relationship. In the defence sector an ongoing programme of exchanges, training and capacity building between our defence and security establishments exists.
Vietnam Prime Ministers Visit – The Programme :
Visit to Bodh Gaya and meeting with the Chief Minister of Bihar – October
October 27th, Vietnamese Prime Minister arrives in Delhi.
October 28th, forecourt ceremony at the Rashtrapati Bhavan.
Visit to Rajghat to pay homage to Mahatma Gandhi.
Series of Calls :
External Affairs Minister / Speaker of Lok Sabha.
Prime Minister and the visiting dignitary will have meetings in Hyderabad House – these will be both in restricted format as well as delegation-level talks – following which the Prime Minister will host a banquet for him. In the evening he will also call on the Vice-President and the President of India before he departs.
The Big Focus of the Visit :
India has a very strong and mature political defence, security understanding and relationship. There is a strong growing cultural relationship. Content sharing in the media, in the TV, exchange of films, youth exchanges. The real big focus is on economic engagement. Targets have been exceeded in trade ahead of schedule. Potential to do even better is there today. India is also looking at extension of greater credit facilities. So, the buyer’s credit under the National Export Insurance Account has been made available to the Vietnamese.
Question and Answer at the Briefing :
Question : In view of the fact that we have already attained the target set for 2015 last year, are you working on any new targets by the year 2020 of 20 billion dollars or something like that?
Official Spokesperson : We are working on those targets and those targets will be decided by the Prime Minister’s when they meet.
Question :Are there any bilateral maritime exercises being planned with Vietnam on the naval side?
Joint Secretary (South) : Not that I am aware of.
Question : Since this visit is taking place barely a month after the President’s visit to Vietnam, taking off from there what specific progress or outcome can we expect in other key areas, apart from economic, like defence or civil nuclear cooperation?
Official Spokesperson : I think it is rather an unfair question to ask. After he specified clearly that the focus of this visit is on economic cooperation and other areas will continue to be dealt with in due course.
We have highlighted for you upfront that our key focus in this visitis going to be economic, and we expect progress on that front. Now if you pick up other areas, there has been progress on those areas just a month ago. So, what do you expect? That every time we have a meeting you would have across-the-board progress on everything? I think that is unfair to ask. We have made it very clear that the key focus this time is going to be economic.
Question : India has offered Vietnam a line of credit for purchase of defence equipment. What kind of equipment will India be giving?
Joint Secretary (South) : You are right, we concluded the Defence LoC for USD 100 million during the visit of President last month. This is currently under discussion for its implementation. We will see progress on this as the negotiations continue between the Vietnamese and key defence suppliers.
Question : Will the Chinese concerns be an impediment in India accepting Vietnam’s offer for participation in more oil exploration blocks in the South China Sea?
Official Spokesperson : Vietnam has offered us some blocks in the South China Sea, we are examining it. If they are commercially viable for us, certainly we will take those into account and proceed further. India and Vietnam relationship is not contingent on other countries. Our relationship is a bilateral one and we are focused on those bilateral aspects of our relationship.