Vietnamese President Tran Dai Quang’s three-day visit to India on March 2-4 marked the completion of 45 years of diplomatic ties between India and Vietnam.

It also symbolized deepening engagement under the Modi government’s “Act East” policy, adn followed up the attendance of Vietnam's prime minister along with other leaders of the Association of Southeast Asian Nations at the Republic Day parade in New Delhi in January.

President Tran Dai Quang held a comprehensive discussion with Prime Minister Narendra Modi, with the two sides signing agreements in the fields of atomic energy, trade, agriculture and others.

Beijing has in the past declared India’s oil exploration activities with Vietnam illegal.

One of the pillars of the India-Vietnam strategic partnership is defense cooperation. While India has expressed its desire to play an important role in promoting peace, security and prosperity in the Indo-Pacific region, during Quang’s visit, New Delhi reaffirmed its willingness to help Vietnam enhance its military capabilities and agreed to expedite the implementation of a US$100 million line of credit for building high-speed patrol boats for the Vietnamese Border Defense Force.

New Delhi also agreed on the early signing of a framework agreement on a US$500 million line of credit for the defense industry. After the two countries' armies in late January began their first joint military exercise in Jabalpur, Madhya Pradesh, New Delhi and Hanoi have now agreed to strengthen cooperation in the maritime domain, including anti-piracy, security of sea lanes and exchange of shipping information.


Credit: REUTERS/Adnan Abidi

Vietnam's Prime Minister Nguyen Xuan Phuc and his wife Tran Thi Nguyet Thu walk toward their car after their arrival at Air Force Station Palam in New Delhi, India, Jan. 24, 2018.

The deepening defense engagement between India and Vietnam reflects India’s deep interest in actively participating in shaping the political security order in Asia-Pacific. In so doing, the Indian strategic community believes that a strong defense relationship with Vietnam can prove a huge strategic asset for India, so far as its interests in the South China Sea are concerned.

As about 50 percent of its trade transits through the South China Sea, New Delhi needs to foster security ties with Hanoi to ensure that there is absolute freedom of navigation in this part of the world. At the same time, as Vietnam has a territorial dispute with China over the Paracel islands in the South China Sea; Beijing has in the past declared India’s oil exploration activities with Vietnam illegal, so both countries have a shared interest in containing China’s efforts to convert the South China Sea into as its exclusive zone of influence.

It is against this background that the two sides reiterated the importance of achieving a peaceful and prosperous Indo-Pacific region where sovereignty and international law, freedom of navigation and overflight, sustainable development and a free, fair and open trade and investment system are respected.

As the U.S. has always wanted India to become a part of its containment policy against China, the shift in India’s stance under the Act East policy will help New Delhi cement its ties with Washington. This aspect assumes further significance in view of the fact that just before President Quang’s visit to India, the U.S. aircraft carrier USS Carl Vinson arrived in Vietnam for the first time since the end of the Cold War.

Moreover, Vietnam has emerged as one of the largest arms importers in the world, and India is focused on transforming its status as a defense importer into that of an arms exporter. Meanwhile, Modi has spoken about the two countries collaborating on defense manufacturing and technology transfers, both of which would improve Vietnam's defensive prowess.

Ever since India initiated the process of economic reforms in the 1990s, New Delhi and Hanoi have expanded economic cooperation, with trade between the two countries reaching US$8 billion in 2014. The Modi government’s Act East policy focuses on strengthening ties in this area, with the aim of increasing the current volume of bilateral trade to a tune of US$15 billion by 2020. Quang’s promise to support India’s active participation in regional linkages and cooperation including the Asia-Pacific Economic Cooperation (APEC) framework will positively impact India’s economic interests in the region.


Photo Credit: Reuters/達志影像

A worker walks past a container ship at Mundra Port in the western Indian state of Gujarat April 1, 2014.

Energy is another crucial area of the relationship between the two countries. India needs to find viable sources of energy to sustain and intensify its economic growth. India’s Oil and Natural Gas Corporation (ONGC) has already been working with Vietnam on oil exploration activities and Quang’s appeal to the Indian business community to expand the cooperation on land and on the continental shelf along Vietnam's Exclusive Economic Zone (EEZ) is a welcome development for New Delhi.

At a time when China is aggressively promoting its “One Belt One Road Initiative,” India is also striving to improve infrastructure connecting Southeast Asian countries. In this context the Modi government has urged Vietnam to utilize various Indian initiatives aimed at Cambodia, Laos, Myanmar and Vietnam (so-called CLMV countries), including the US$1 billion line of credit for physical and digital connectivity projects. The two sides agreed to explore the possibility of extending the under-construction India-Myanmar-Thailand Trilateral Highway further to Vietnam through Cambodia and Laos. This will help India strengthen its presence in ASEAN and other similar regional forums.

This convergence of interests in security, defense, energy, economy, regional cooperation, connectivity and other areas will play a vital role in directing the dynamics of bilateral ties between India and Vietnam in future.

Read next: Vietnam Wants India to Help in the South China Sea

Editor: TNL Staff