India-Vietnam commercial ties yet to match potential: consul general

India-Vietnam trade and investment ties have grown rapidly in the last two decades, but they have not yet matched their potential, given the market size of both nations.

Madan Mohan Sethi, Indian consul general in Ho Chi Minh City, said Tuesday that India now ranked 25th among 146 countries and territories investing in Vietnam with 407 projects and total registered capital of more than $1.02 billion.

For large Indian investors and corporations, Vietnam has become an important partner and investment destination in many fields, he said at a conference on promoting investment and developing trade and tourism with Indian partners held in the south-central province of Binh Dinh.

Sethi said bilateral trade between India and Vietnam has also recorded impressive growth from $200 million in 2000 to $15.1 billion in 2022 and $14.3 billion in 2023. However, the potential for further cooperation between the two sides remains huge, especially when taking into account the market size of both countries, he stressed.

He noted that Godrej was the first Indian company to set up a production facility at the Binh Duong industrial park in southern Vietnam in 1994. After that, many other large corporations like Tata, Marico, Wipro and KCP have also invested in Vietnam.

The total value of India's direct and indirect investments in Vietnam currently amounts to more than $3 billion, including $1 billion in direct investments, he said.

In particular, enhanced air connectivity between India and Vietnam, with direct flights from five major Indian cities – Delhi, Mumbai, Kolkata, Chennai and Bangalore - to Vietnam’s Hanoi and HCMC has promoted trade and investment, Sethi said.

Many Indian businessmen and investors are exploring the Vietnamese market, seeking investment and cooperation opportunities, he added.

The Indian consul general said he had visited Quy Nhon town of Binh Dinh province many times and realized that the place has great potential to develop large and small industries in many fields.

The Indian consulate was ready to connect Vietnamese businesses with leading Indian corporations in smart agriculture, aquaculture, infrastructure, IT, health care, education and many other fields, Sethi added.

Deputy Minister of Planning and Investment Do Thanh Trung said that as of this May, Vietnam had attracted 40,285 foreign investment projects with a total registered capital of more than $481 billion.

He echoed consul general Sethi in noting that Vietnam has become an important partner and investment destination in many fields for large Indian investors and corporations. This formed a solid foundation for both countries to continue making their comprehensive strategic partnership increasingly intensive and substantive, he added.

Five memoranda of understanding (MoUs) were signed between Binh Dinh’s businesses and Indian partners at the conference.

Tuong Minh Binh Dinh Software Solutions Co., Ltd. and the Indian Robotics Association signed an MoU on researching and analyzing opportunities to develop resources in the field of robotics in Binh Dinh province.

Under the agreement, the Indian side would support the province in building investment promotion and connection programs, introducing Binh Dinh to Indian investors in the field.

The Forest Products Association of Binh Dinh inked a deal with the Orissa Small Scale Industries Association (OSSIA), and the provincial Young Entrepreneurs Association signed an MoU with the Indian Economic Trade Organization (IETO).

The provincial Tourism Association signed an MoU with the Association of Buddhist Tour Operators (ABTO); and Quy Nhon University signed another with the Indian Robotics Association.

Binh Dinh Chairman Pham Anh Tuan said the province was focusing on developing and quickly completing its infrastructure system. It was also working to improve operational efficiency of the Quy Nhon port cluster, adding large-scale deep-water seaports in its northern part and upgrading Phu Cat Airport to host international flights in the near future.

Binh Dinh has invested in many Industrial parks and industrial clusters; and prepared many clean land funds (20-30 hectares each year, along the East-West axis routes and coastal roads) to welcome investors, Tuan said.

In particular, many local industrial parks were offering infrastructure rentals for $25-60 per square meter per 50 years, much lower than similar facilities across the country, he noted.

Tuan also noted that Indian multinational companies and large corporations with great economic potential were operating in fields of great demand in Binh Dinh, including information technology, software manufacturing, pharmaceuticals, AI, biotechnology, nanotechnology, telecommunications, shipbuilding, aviation, services, trade and tourism.

Therefore, he hoped Indian investors would continue to explore opportunities for potential investment projects in Binh Dinh.

As of May 2024, Binh Dinh was home to 104 foreign investment projects with a total registered capital of nearly $1.3 billion. Among them, four worth $.24 million have been invested by Indian firms, the conference heard.