HCMC – While two-way trade between India and Vietnam has recorded impressive growth in the past few years, there is still untapped potential for Vietnam’s goods to be exported to India, said experts at a recent business forum.
At the second edition of the India-Vietnam business connection: update on the import-export market, held in HCMC on March 31 by the Consulate General of India in HCMC and the Vietnam Chamber of Commerce and Industry – HCMC branch (VCCI-HCMC), Vo Tan Thanh, vice president of VCCI cum general director of VCCI–HCMC branch, said as both countries are opening up and recovering in the post-Covid context, this is the perfect time to work on promoting cooperation toward better effectiveness.
The validity of the ASEAN-India Trade in Goods Agreement and India’s recognition of Vietnam as a market economy have enhanced bilateral trade between Vietnam and India.
Vietnam is now India’s 18th largest trade partner globally and the fourth largest in the ASEAN, following Singapore, Indonesia and Malaysia.
Meanwhile, India is the seventh largest trade partner, the seventh most prominent exporter and the ninth largest importer of Vietnam.
In 2021, despite the Covid-19 pandemic, two-way trade between the two countries exceeded US$13 billion for the first time, reaching US$13.2 billion, surging 37% over the previous year. Of the total, Vietnam exported US$6.2 billion worth of products to India and spent nearly US$7 billion on imports.
In the first month of this year, the Vietnam-India trade reached US$1.38 billion.
As of December 2021, India was the 25th biggest investor in Vietnam with 313 projects with total registered capital of US$910.41 million, Thanh added.
Le Thi Mai Anh, head of the Division for Southeast Asia, South Asia and Regional Cooperation under the Ministry of Industry and Trade’s Asia-Africa Market Department, said in addition to the pandemic, the Russia-Ukraine crisis and economic sanctions imposed on Russia had caused a great impact on the global economy, including Vietnam, with the soaring prices of input materials and supply chain disruptions.
The globalization trend has been gradually shifting to regional and bilateral cooperation. Both Vietnam and India have been aware of each other’s roles. India is one of the 10 largest trade partners of Vietnam and Vietnam is also an essential partner of India.
Their trade value surged by nearly four times, from US$2.7 billion in 2010 to US$9.6 billion in 2020, with average annual growth of nearly 16%. Due to Covid-19, their bilateral trade fell 14% in 2020 but bounced back strongly in 2021 to reach an all-time high of US$13.2 billion. Anh expected the figure to reach US$15 billion soon, as targeted by the high-ranking leaders of the two countries.
She suggested Vietnamese enterprises enhance the export of some products, such as computers, phones and accessories, rubber, materials, plastics and chemicals, to India and the import of materials for production.
She affirmed the importance of India to Vietnam’s exports, saying that trade activities need to be promoted. However, enterprises must discover import-export information and the policies of India through official channels, determine reliable partners, choose appropriate payment methods and prepare for possible issues, she said.
According to Ashish Jain, head of the Marketing & Research Division under the Federation of Indian Export Organizations, the total trade value between Vietnam and India in the financial year 2021-2022 (Apr-Jan) was US$11.3 billion, and India is expected to be among the five largest goods suppliers to Vietnam.
Speaking at the business forum, Sai Sudha Chandrasekaran, senior assistant vice president of Invest India, said India had emerged as an economic powerhouse. It was one of the countries with the highest GDP growth globally.
Its population has reached some 1.4 billion people, so India is a large consumption market, creating opportunities for enterprises from other countries, including Vietnam.
Bui Trung Thuong, Trade Counsellor of the Embassy of Vietnam in New Delhi, said multiple programs would be held this year to celebrate the 50th anniversary of establishment of diplomatic relations between India and Vietnam, and the embassy would continue supporting Vietnamese enterprises to seek opportunities to invest and export products to India.