According to business communities of Vietnam and India, the Prime Minister Nguyen Tan Dung’s visit to India in July will make a breakthrough in the Vietnam-India relationship, especially cooperation in the field of trade and investment. Right after the event took place, businesses of both countries have promoted trade and investment activities. Recently, a delegation of 20 businesses from Kolkata - one of the most dynamic states in India, visited Vietnam. Most of them are operating in the fields of information technology, electronics components, machines, equipment, steel, iron, cement and pharmaceutical products.
Executive director of Manakasia Corporation, B.K. Agrawal said his company specializes in information technology and wants to seek investment opportunities in Vietnam. He added that Vietnam is a potential market and an attractive investment destination.
Over the past years, trade turnover between Vietnam and India increased by 20-30 percent per year. In 2003, trade turnover was only US$490 million and rose to over US$1 billion in 2006, fulfilling the goals of the Vietnam-Indian Action Plan in the 2004-2006 period. Vietnam’s key exports to India include farm produce, handicrafts, footwear, garments and textiles, wood products, electronics spare parts with turnover reaching over US$880 million. The country’s key import items from India are pharmaceutical products, medical equipment and information technology.
Vietnamese goods are favourite in Indian market
In an interview granted to a VOV reporter, many Indian businesses said Vietnamese businesses could further boost their products in the Indian market. General Director of Co-ordinator CSF II, Mr R.A.Poddar said his company has great demand for imported silk products, cloth, and souvenirs. Currently, the company is importing these goods from China. He said “ I am really surprised to know that Vietnam has a traditional silk industry and Ha Dong’s silk products are very beautiful. Each year, my company imports silk products worth US$5 million”. He unveiled a plan to seek Vietnamese partners to import the products in future and wish to build a plant in Vietnam to produce and export goods to a third country.
To promote exports in the Indian market, deputy head of the Africa and Southwest Asia Department under the Ministry of Trade and Industry, Tran Quang Huy said businesses of both countries should understand about each other’s markets, competitive goods, partners’ demands as well as trade customs to map out strategic orientations on import and export in the long-term.
In addition, Mr Huy said that both sides should boost information exchange through various channels, such as the Vietnamese Embassy and trade representative offices of Vietnam in India, the Vietnam Chamber of Commerce and Industry (VCCI), relevant ministries and craft associations. They should also exchange information on trade and investment policies, trade promotion activities, tourism investment, schedules for exhibitions and trade fairs in each country, as well as export items where the two countries have comparative advantages.
Vietnam is a market with great potential
2007 marked a big leap in India’s investment into Vietnam. In February, the ESSAR Group of India signed an agreement to invest in a rolled steel project worth US$527 million in southern Ba Ria-Vung Tau province. In May, India’s TATA Group, the world’s top five leading steel groups, signed a Memorandum of Understanding with the Vietnam Steel Corporation on building the Ha Tinh steel production complex, and exploring the Thach Khe iron mine with total capacity of 4.5 million tonnes of steel a year. The two projects helped India become of Vietnam’s 10 largest foreign investors and helped Vietnam become India’s largest investment receiver among ASEAN-member countries.
Assessing the impacts of these projects on Vietnam’s steel production sector, President of the Vietnam Steel Association Pham Chi Cuong said the presence of big international steel groups in Vietnam has reinforced the attractiveness of the Vietnamese steel market. With a large amount of investment and modern technologies, foreign-invested projects will help boost the development of the local steel production industry.
Vietnam has become an attractive investment venue for Indian investors thanks to its stable political situation, open investment environment, cheap labour, skilled workers and large market with a total population of more than 80 million, said Chairman of the Bharat Commercial Office in Kolkata, Prahalad Rai Agawala, who is also head of the Indian business delegation currently visiting Vietnam.
He also expressed his desire to promote bilateral cooperation between the VCCI and the Bharat Commercial Office. “We hope that the visit to Vietnam this time will set up an information channel via the Internet through which we can update information and create favourable conditions for enterprises of both sides to directly exchange information and remove obstacles in language differences,” Mr Agawala said.
“We asked the two countries’ Governments to open a direct air route from Kolkata to Hanoi in order to boost trade and investment activities,” he said.
Mr Agawala noted that Kolkata is one of India’s states achieving the most rapid and dynamic development. Its key industrial products include steel, cotton, knitwear, pearls and jewellery. Through exporting products, Indian enterprises expect to provide effective measures to boost socio-economic development in Vietnam and gain experiences from Vietnamese partners in reducing production costs in certain industries as well as integrating into the global market.
“We also pay special attention to the fields of agro-forestry and aquaculture, such as fish breeding and producing rice varieties, he added.
Vietnam and India have established a time-honoured traditional relationship. Both countries have many similarities in traditional culture and national development. In particular, India considers Vietnam a key partner in the Association of Southeast Asian Nations (ASEAN). This is an important foundation for both sides to promote long-term cooperation for mutual benefits. Judging from the current developments and joint efforts by the two countries’ Governments and business communities, the set target of achieving a two-way trade turnover of US$2 billion in 2010 is within reach.