New Delhi: A boom in bilateral trade, rising FDI, value chain linkages and trade in services quietly underscore the deepening economic cooperation between the two partners, amidst growing support for a free trade agreement between India and Vietnam. I’m here. A corollary to India’s increasingly strategically important Southeast Asian country. The idea has yet to materialize, but early indicators hint at the possibility of a comprehensive economic partnership agreement in which Vietnam is interested, a source with knowledge of the development told The Sunday Guardian. told to
India-Vietnam bilateral trade will surge from US$3.48 billion to US$11 billion in 2021 and is likely to exceed US$15 billion by 2022, resulting in a number of “high quality” regions After signing the agreement, Vietnam is contributing to India’s interest in advancing to become a global FTA hub. bilateral agreement. Vietnam shares many of her FTA partners with India within the ASEAN-India FTA framework since 2010. An agreement between India and Vietnam can strengthen partnerships and become a building block for the Indo-Pacific. Her latest FTA with the European Union makes Vietnam the only country in ASEAN other than Singapore to have her FTA with the EU.
“One of the reasons why Vietnam is so important to India is the existence of the value chain, which is an important area for the government,” said Prabir De, a professor at the Research and Information Systems for Developing Countries (RIS). increase. ASEAN-India Center of Tanks. South Korean giant Samsung, headquartered in Seoul, has one of his largest production facilities in Noida, India, and another equally large unit in Hanoi, Vietnam, De said. . “There was a time when Vietnam used to import all its mobile phones, but now all Samsung phones are exported from Vietnam. Samsung’s units in Noida and Hanoi have a very strong production relationship. I have,” he said De. With free trade between India and Vietnam, these dynamics are expected to create such luxury goods, which is why India needs Vietnam on its side to strengthen production linkages in automobiles, consumer durables. It is said that
While the prospects for stronger economic cooperation between New Delhi and Hanoi are on the upside, it is also true that Vietnam is effectively positioned as an attractive destination for foreign investment. Investors looking for alternatives to China. According to Prabir De, a key advantage for Vietnam is its geopolitical position, which allows it to develop a highly skilled workforce. Vietnam and China share a border, so workers go to Guangdong, China to train, acquire skills and discipline, and add value to their human capital.
Amid growing trade ties with India, changes in the trade mix between 2010 and 2020 have allowed Vietnam to expand its access to the Indian market and achieve a trade surplus. Fire floats, dredger, beef meat, frozen. In 2020, the top three components were steel/non-rolled flat products, beef/frozen products, followed by automobile parts/accessories. Meanwhile, Vietnam expanded her exports to India in 2010, accounting for the top three commodities: radiotelephone transmission equipment, natural rubber, balata, gutta perch, coal, briquettes, ovoids and similar products. In 2020, India’s imports of radiotelephone transmitting equipment grew significantly from Vietnam, while line telephony electrical equipment and television receiving equipment ranked second and third.
These successes in FTAs, investment and trade are the result of meticulous planning of Vietnam’s economic growth and economic liberalization efforts since 1986. According to Professor Pankaj Jha, Professor and Dean (Research) of the Jindal School of International Affairs, what makes Vietnam attractive for an FTA with the EU is that there are no blocs and restrictions, and if the market is opened up, it can reach the EU’s larger market. will be able to access. “Vietnam believes that we should look for full trees rather than looking for hanging achievements,” Jah said. Moreover, anti-corruption measures in Vietnam by the party leadership are extensive. “Their main criterion is to join the ranks of upper-middle-income countries by 2045 and become a middle-ranked country in Asia. said.
A combination of strategic moves can be strongly positioned combined with special efforts on policies and regulations of some countries such as Japan, Thailand and Indonesia to promote more investment in Vietnam. Vietnam is winning the game, such as by focusing on the sector of Vietnam. However, the amount of investment Vietnam has drawn from around the world over the past five years is US$18-19 billion, especially in steel and cement, according to Jha.
Going forward, a bilateral FTA between India and Vietnam will enable India to expand access to export markets, improve trade facilitation, encourage investment, reduce barriers to intellectual property, e-commerce, and government procurement and trade. lower the Indian exporters face several barriers in Vietnam, he said. Because Indian processing plants are not registered with the government, hindering Indian exports. When Indian seafood exporters run into trouble with her exports to ASEAN countries, Vietnam imposes zero tariffs on imports from Vietnam, so it buys from Indian exporters and exports to China. Furthermore, India (after the introduction of GST) offers a single market to all its trading partners including ASEAN, but ASEAN is not yet a single market, so India has 10 different economies and 10 different economies within ASEAN. have to face different trade regimes.
Towards a potential FTA, India and Vietnam could work on digital partnerships, fintech, digital payments, interoperability and enhanced financial cooperation between the Central Bank and other EXIM banks. Improving maritime trade and connectivity through direct transport links between India and Vietnam, trade facilitation through customs cooperation, single window, standard certification, setting up India-Vietnam B2B portals on trade and investment to initiate FTA It is one of the other foundations recommended for process.