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India-Vietnam Relations: the Road Ahead

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India-Vietnam Relations: the Road Ahead IPCS No. 40, April 2007 SPECIAL REPORT India-Vietnam Relations THE ROAD AHEAD Yogendra Singh INSTITUTE OF PEACE AND CONFLICT STUDIES B 7/3 Safdarjung Enclave, New Delhi110029, INDIA Tel: 91-1151652556-9; Fax: 91-11-51652560 Email: [email protected]; Web: www.ipcs.org INDIA-VIETNAM RELATIONS The Road Ahead Yogendra Singh, Research Scholar, Jawaharlal Nehru University India and Vietnam share long standing, represented at the funeral of Ho Chin Minh historic, cultural, religious, economic and in September 1969 by its Foreign Minister. strategic relations. In 2007 both countries On 2 October 1970, at the United Nations, celebrate the 35th anniversary of the the Indian government demanded a firm establishment of diplomatic relations. On 7 timetable for the withdrawal of American January 1972, Vietnam and India had troops from Vietnam. India’s closeness with decided to promote their diplomatic Soviet Union also helped in defining its relations to the ambassadorial level. relation with Vietnam. During this period, Although geographically, Vietnam and India gave the Vietnam issue an emphatic India are not neighbours, India’s relations thrust in its foreign policy as is evident from with Vietnam have always been closer than Foreign Minister Swaran Singh’s statement those to any of its neighbors. Now moving in the Indian Parliament’s lower house, the forward from ideological linkages, both Lok Sabha on 26 April 1972, when he countries are endeavoring to refurbish their declared that “the liberation of relations according to the requirements of Bangladesh was a great heroic event and economic globalization. the liberation of Vietnam will be equally heroic and great.” Although,in 1972 India and the North Vietnam raised the level of AN OVERVIEW OF THE INDIA-VIETNAM their representatives from consular to RELATIONSHIP ambassador India’s relations with South During the Vietnam crisis there were Vietnam remained at the consular level. differences in India’s relations with the two The Indian decision got a violent response regimes in Vietnam. In 1954, Indian Prime in South Vietnam and a number of Minister Jawaharlal Nehru visited demonstrations took place in front of the Indochina. His visit improved the relations Indian consulate-general’s office and ICC between India and North Vietnam while headquarters. The government of South the relation between India and South Vietnam expressed opposition to India’s Vietnam deteriorated. His visit was presence in the ICC and refused to extend reciprocated by the Ho Chin Minh visit to visas to Indian delegations. Subsequently, India in February 1958 and he was the ICC by a unanimous resolution decided welcomed by Nehru as “a great to shift the Indian delegation out. India was revolutionary and an almost legendary the only one of the three original ICC hero.” countries not included in the second supervisory commission on Vietnam in India, as a member of International 1973. Commission of Control and Supervision for Vietnam (ICC) expressed concerns over the During the Janata regime at New Delhi, air strikes in North Vietnam initiated in India adopted a circumspect policy February1965 and during Indira Gandhi’s towards Indochina professing premiership in 1966, called for an nonalignment. Subsequently, India’s immediate cessation of bombings and the sympathy with Vietnam followed the resolution of the Vietnam conflict within the principle of anti-colonialism and opposition framework of the Geneva accords. Gandhi to racism. India was pleased with the Paris also voiced her concerns in the communiqué Accords of 1973 that led to the American of 16 July 1966 with Soviet premier withdrawal from Indochina and welcomed Aleksey Kosygin, in Moscow. India was also the final solution. Thereafter, India- IPCS SPECIAL REPORT No 40, April 2007 Vietnam ties have developed in a between the two countries such as in constructive manner. Both countries ensuring sea lanes security, prevention of established a Joint Commission for sea piracy, and so on. A commonality of Economic, Scientific and Technical approaches can be seen in the foreign Cooperation for providing an institutional policies of India and Vietnam towards mechanism to bilateral cooperation. India major global player like the US and China. and Vietnam opened a new chapter in Both seem to keen on forgetting their their relationship in May 2003, during the differences with the US and ready to shed occasion of the visit to India by Nong Duc their past hostility with China. However, Manh, Secretary General of the Communist India and Vietnam also share common Party of Vietnam by signing the Joint strategic concerns regarding China. Thus, in Declaration on the Framework for the light of existing international realities Comprehensive Cooperation. Vietnam and both have enough ground to develop a India also signed a Plan of Action for the strategic relationship. implementation of the Joint Declaration in 2004. ECONOMIC LINKAGES Both India and Vietnam had closed COOPERATION IN INTERNATIONAL economies in the past but are now FORA enthusiastically encouraging private Unlike their past relations, contemporary participation in their economies. However, India and Vietnam relationship is more despite an extremely cordial relationship strategically and economically oriented between them, the bilateral trade and rather than ideologically. Vietnam investment has not grown according to their appreciates India’s international role and potential. India-Vietnam trade has track record of being a peace-loving increased from US$50 million in 1991 to country. Under the cooperation agreement nearly US$817 million in 2005-06. but this signed between in 2003, both countries bilateral trade accounts for just 0.2-0.3% have agreed to conduct regular high-level of India’s total trade volume and 0.3% 0f meetings, cooperate in the UN and other Vietnam’s trade volume. The list of major international fora and assist each other in Indian exports to Vietnam includes animal protecting their respective interests in feed, pharmaceuticals, medicinal materials, international arena. With these sentiments, plastic, iron and steel, seafood chemicals, Vietnam supports India in its peaceful use chemical products, machinery and of nuclear energy. It also backs India’s bid equipment, leather and leather garments, for a permanent candidature in an motorcycle parts, fertilizers, and expanded United Nations Security Council. automobile parts. India’s import basket in In return, Vietnam received India’s support the case of Vietnam contains mainly for entry into the World Trade pepper, tea, coffee coal, rubber, Organization. Vietnam and India work cinnamon, and electronic components. closely together in organizations like ASEAN, and Mekong Ganga Cooperation Trade links between India and Vietnam (MGC) and Vietnam is also expected to started off with a bilateral trade help India in gaining membership of agreement signed in 1978. A revised organizations like Asia Pacific Economic version of it came into being on 8 March Cooperation (APEC) and Asia Europe 1997 and trade ties were further Meetings (ASEM). strengthened with the Bilateral Investment Promotion and Protection Agreement In the security arena, India and Vietnam (BIPPA) which was ratified in December cooperate under the mechanism of the 1999. Besides the above mentioned ASEAN Regional Forum (ARF). Being provisions a joint business council has also maritime nations, there is enormous been established to facilitate trade potential for maritime security cooperation cooperation. As a body of private business 2 INDIA-VIETNAM RELATIONS The Road Ahead sectors of the two countries, the council’s cost around US$527 million and expected work is coordinated by the Federation of to be completed in 30 months, the project Indian Chambers of Commerce and will significantly boost total investment from Industry (FICCI) on the Indian side and the India to Vietnam. A Vietnamese company, Vietnam Chambers of Commerce and FPT has made an investment of Industry on the Vietnamese side. A review US$150,000 in an Indian technology of India-Vietnam bilateral economic ties development and investment project. reveals the fact that both have enormous Vietnam as a leading producer of oil and opportunities to benefit from the gas also has a vital place in India’s quest complimentary nature of economies. For to diversify its energy supply sources. The example India’s expertise and capital can overseas arm of India’s state-owned be highly useful for Vietnam in fields like exploration company, Oil and Natural Gas petrochemical, pharmaceuticals, Corporation (ONGC) is involved in information technology, financial services, exploration projects in Vietnam and has railways and so on. However, some signed a petroleum sharing contract with problems exist on the road to enhancing PetroVietnam for three blocks 06, 12E and bilateral trade relations such as their clash 19 in Nam Con Son basin, about 370 km of interests over the issue of coffee and tea offshore. It also signed a MOU with in the ongoing FTA negotiations between PetroVietnam Investment and Development India and ASEAN. Company (PIDC) on 9 January 2001. for collaboration between ONGC Videsh and The potential of tourism as an area of PIDC in the exploration and production of bilateral economic cooperation has also not hydrocarbons in Vietnam. ONGC Videsh been realized fully so far. In 2006, also has a 45% stake in a joint venture Vietnam received around 3.5 million project of gas exploration with British foreign tourists, of which only 13,000 were Petroleum, PetroVietnam and Statoil in Indians and therefore, Vietnam's national Vietnam’s Lan Do and Lan Tay offshore flag carrier Vietnam Airlines and Indian gas fields. ONGC Videsh would get Airlines announced sharply reduced round- US$60 million in revenue from this project. trip ticket prices on the New Delhi- This project would transmit gas along a Bangkok-Hanoi route as an effort to lure 399-km pipeline to a power complex in the more Indian visitors to Vietnam. south of Ho Chin Minh city where it will be used to generate electricity for Vietnam’s INVESTMENTS AND JOINT-VENTURES domestic consumption.
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