Strategic ties between India and Vietnam extend

Relations between India and Vietnam continue to strengthen beyond headline narratives, with both nations placing renewed emphasis on expanding trade, investment, and collaboration in emerging sectors.

During the recent visit of Vietnamese President To Lam to India, the two sides agreed to set an ambitious bilateral trade target of US$25 billion by 2030, signalling a shared commitment to deepen economic engagement. The early timing of the visit—within weeks of his appointment—was seen as a strong indication of the importance Hanoi places on its relationship with New Delhi.

Both countries have pledged to promote balanced and mutually beneficial trade by improving market access, particularly for agricultural goods, while also working to streamline regulatory frameworks to make it easier for businesses to operate across borders.

A key focus of the partnership is strengthening supply chains in priority sectors. Vietnam has expressed its intention to diversify import sources and increase purchases from India to support its domestic industries and export markets.

Expanding Economic and Technology Collaboration

India and Vietnam are aiming to boost two-way investments across a wide range of sectors, including high technology, manufacturing, logistics, renewable energy, electric vehicles, information technology, healthcare, agriculture, and tourism. Efforts are also underway to connect startup ecosystems and innovation hubs in both countries to encourage entrepreneurship and technological advancement.

The two sides have agreed to support Micro, Small, and Medium Enterprises (MSMEs) and enhance their participation in digital trade and global value chains through improved policy frameworks and regulatory cooperation.

In the financial sector, a memorandum of understanding between the Reserve Bank of India and the State Bank of Vietnam aims to promote innovation in digital payments. Plans include linking retail payment systems through QR code technology to facilitate tourism and cross-border transactions.

Both nations are also looking to expand cooperation in critical and emerging technologies such as digital public infrastructure, 6G, artificial intelligence, space research, nuclear science, biotechnology, and advanced materials. Joint research initiatives, R&D centres, and collaborative product development are expected to play a central role in this effort.

Growing Trade and Investment Links

Economic ties between the two countries have grown significantly over the years, with bilateral trade rising from approximately US$200 million in 2000 to nearly US$14.9 billion in 2024. Indian investments in Vietnam are estimated at around US$2 billion, while Vietnamese investments in India continue to expand across sectors such as pharmaceuticals, IT, and construction materials.

Vietnamese electric vehicle manufacturer VinFast is currently developing a major production facility in Tamil Nadu, further highlighting the deepening industrial partnership.

Strengthening Defence and Security Cooperation

While defence collaboration often dominates public attention, it remains only one pillar of the broader partnership. Both countries have agreed to enhance cooperation in defence through joint exercises, research, training, and co-production of advanced technologies.

There is also a growing focus on maritime security, cybersecurity, counterterrorism, and tackling transnational crime. Enhanced training programmes and knowledge-sharing initiatives are expected to further strengthen institutional ties.

The partnership also includes plans to expand defence procurement, including advanced systems such as the BrahMos missile.