India and Vietnam have traditionally enjoyed strong and vibrant commercial relations. Bilateral trade continues to grow rapidly and touched US$ 2.5 billion in 2008. India has emerged as the 10th largest exporter to Vietnam in 2008 as exports touched US$ 2 billion registering a growth of 55% over 2007. Vietnam’s exports to India in 2008 registered an increase of 47% over 2007 and reached USD 389 million. More than thirty Indian companies have set up Representative Offices in Vietnam. A large majority of these offices are located in Ho Chi Minh City.
The following table summarises the quantum of bilateral trade over the last few years:
(in USD million)
| Year |
Exports
From India |
Imports
Into India |
Total Trade |
| 1995 |
61.5 |
10.4 |
71.9 |
| 1996 |
88.5 |
9.1 |
97.6 |
| 1997 |
84.8 |
13.2 |
98 |
| 1998 |
108.7 |
12.6 |
121.3 |
| 1999 |
122.8 |
17.0 |
139.8 |
| 2000 |
178.4 |
47.2 |
225.6 |
| 2001 |
229.2 |
44.9 |
274.1 |
| 2002 |
324.6 |
51.4 |
376.2 |
| 2003 |
456.9 |
32.3 |
489.2 |
| 2004 |
593.5 |
77.2 |
670.7 |
| 2005 |
598.8 |
97.7 |
696.5 |
| 2006 |
880.3 |
137.8 |
1018.1 |
| 2007 |
1357 |
179.7 |
1536.7 |
| 2008 |
2094.4 |
389 |
2483.3 |
(Source: General Statistic Department, Government of Vietnam)
Major commodities exported from India to Vietnam are animal feed (accounting for almost one-thirds of the total exports), machinery & equipment, pharmaceuticals and pharmaceutical materials, ordinary metals, material for plastics, iron & steel, Leather & textile materials, Medicine ingredients, Cotton and pesticides.
India’s imports from Vietnam are largely dominated by commodities such as coal, pepper, rubber and cinnamon. Computer hardware, garments and textiles also figure among prominent items imported from Vietnam.
Vietnam’s economic policies have opened up tremendous opportunities for Indian investment, both for tapping the growing domestic and ASEAN market and for exports to other countries. The tremendous political goodwill for India is an added incentive for Indian companies to invest in Vietnam.
Trade related issues are reviewed by the two countries under the aegis of the Indo-Vietnam Joint Business Council, a body comprising private business sectors in the two countries led by FICCI on the Indian side and Vietnam Chamber of Commerce & Industry on the Vietnamese side. It first meeting took place in Hanoi in 1993. The last meeting of the Joint Business Council was held during the visit of Prime Minister Dung to India in July 2007.
Since 1976, India has extended 14 Lines of Credit totaling Rs.361 crores to Vietnam. A line of credit agreement for US$45 million was signed in January 2008 between EXIM Bank of India and Finance Ministry of Vietnam for construction of a Hydropower plant.