Vietnam is Indian fund Aavishkaar Capital’s investment focus: exec

Aavishkaar Capital has identified Vietnam and Indonesia as two key markets in Southeast Asia, with the agriculture and food sector firmly in its sights, said Abhishek Mittal, a partner at the Indian investment fund.

Mittal shared this information at a seminar on Guidance and Financial Support for ESG Implementation to Access the EU Market, held in Ho Chi Minh City on Tuesday.

The executive said the fund is looking to invest in businesses across three main areas.

First, agriculture and food. The fund is looking for companies that export agricultural products, fresh or processed fruits; adopt sustainable farming practices; or produce and distribute organic or non-GMO products.

Second, Aavishkaar Capital is interested in companies offering eco-friendly packaging, green warehousing, cold chain logistics, or climate-adaptive supply chain solutions.

Third, the fund targets producers in the textile, garment, and footwear sectors, especially those using natural or recycled inputs and adopting sustainable production processes.

Aavishkaar Capital has been engaging in venture investing since 2001. It manages eight funds with over $500 million in assets.

The fund has been present in Indonesia and Bangladesh. Now, it is very eager to expand into Vietnam, said Mittal.

Yen Do, Aavishkaar’s country representative in Vietnam, explained why Vietnam is considered a key market in Southeast Asia.

According to her, both Vietnam and Indonesia are emerging markets with strong macroeconomic indicators and rapid technological transitions. The fund believes technology will drive rapid growth in agriculture, alongside Vietnam's high level of economic openness.

She also stressed that sustainability and climate change adaptation are key priorities for the fund.

ESG (environmental, social, and governance) is a comprehensive framework for evaluating a company’s sustainability and performance efficiency.

At the seminar, Vu Kim Hanh, chairwoman of the High-Quality Vietnamese Products Business Association, noted that securing ESG financing is already challenging, but effectively utilizing such financial support is even harder.

Nguyen Cam Chi, director of sustainability consulting at MCG Management Consulting Co., Ltd., highlighted specific barriers Vietnamese businesses face in practicing ESG.

For example, the EU Deforestation Regulation (EUDR) is a significant hurdle for Vietnamese wood exporters. Moreover, around 50% of Vietnamese coffee growers had no land records, making traceability difficult.

She added that many stringent green regulations are being enforced not only by the EU but also by nearby Asian markets like Japan, South Korea, and Singapore.

However, Chi emphasized that with risk comes opportunity. To meet green standards, Vietnamese enterprises must enhance their knowledge, financial capacity, and data management systems.

With a developing legal framework supported by the government, businesses are increasingly well-positioned to implement ESG practices and access financial support, she added.