Vietnam seeks greater Indian investment at joint business forum

Vietnam became one of the few countries in the world to enjoy positive economic growth of 2.9% last year, despite the negative impact of the novel coronavirus (COVID-19) pandemic, Ambassador Chau told delegates attending the forum.

The country has also made remarkable progress in poverty reduction following more than three decades since the implementation of the Doi Moi (Renewal) process, serving to lower the local poverty rate from 60% to 3%, he added.

According to the diplomat, Vietnam can be viewed as an attractive location for foreign businesses, including those from India, largely due to its strategic location in Southeast Asia, whilst also boasting a long coastline and a modern deep water seaport system that hosts many transshipment routes.

Vietnam has also entered into 14 free trade agreements (FTA) with more than 50 countries and territories globally, including new generation FTAs such as the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) and the European Union – Vietnam Free Trade Agreement (EVFTA).

Furthermore, the country has introduced a host of tax and land rent incentives, alongside building modern infrastructure and boasting a young and skilled workforce with competitive labour costs. 

Meanwhile, Bui Trung Thuong, Vietnamese Trade Councilor to India noted that India makes up one of Vietnam’s 10 largest trade partners, with two-way trade turnover for last year reaching more than US$10 billion, and the figure is set to rise to US$15 billion in the near future.

Vietnam mainly exports machinery & equipment, phones, chemicals, copper, coffee, along with iron and steel to India, while importing iron and steel, meat and seafood, cotton, pharmaceuticals, auto parts, and machinery from the Indian market.

It is thought that textiles, pharmaceuticals, support industries, and renewable energy will be the new driving forces for bilateral trade ties moving forward, said Thuong.

In terms of investment, India has so far poured approximately US$1.9 billion into the Southeast Asian nation, including investments through third-party countries. Data compiled by the Ministry of Planning and Investment of Vietnam reveals that India has some 300 valid projects nationwide, with a total investment of roughly US$900 million as of December, 2020, ranking 26th among foreign investors.

The major fields of investment include energy, mining, agricultural processing, sugar production, tea, coffee, agrochemicals, information technology, and auto part manufacturing, Thuong said.

During the forum, Indian speakers expressed their admiration for Vietnamese economic development achievements over recent years, adding that the nation is viewed as a highly attractive destinations for foreign investors. Indeed, with investment shifts from China continuing to take place there is an increasing need to diversify supply chains.

Participants also maintained that bilateral co-operation will rise, not only in trade and investment, but also in education, people-to-people exchanges, and tourism on the back of the fine development of the mutual ties and the launch of direct air routes between the two countries.

Ambassador Chau answered questions from Indian firms concerning the Vietnamese investment and business environment, as well as the possibility of implementing additional joint cooperation projects in the country.