Many Vietnamese products have secured a firm foothold in the Indian market.

Many Vietnamese products have secured a firm foothold in the Indian market.

US$5 billion in trade revenue by 2015

Since Vietnam and India established diplomatic and economic ties in 1954 and a strategic partnership in 2007, two-way trade has seen a considerable growth.

According to the General Department of Vietnam Customs, Vietnam-India trade revenue has increased from US$1.018 billion in 2006 to US$2.055 billion in 2009 and US$2.755 billion in 2010.

In the first half of 2011, it already reached US$1.8 billion, up 39.2 percent against last year’s same period. The two countries are set to raise the figure to US$5 billion by 2015.

In 2010, the trade deficit dropped to US$769 million, US$446 million lower than 2009’s figure.

India is now Vietnam’s 11^th biggest trade partner whose import rose dramatically, by 116 percent in 2008, 10.8 percent in 2009, and 136.2 percent in 2010. In the first six months of 2011, India imported US$600 million worth of goods from Vietnam, up 50.9 percent from a year earlier, most of which were steel, coffee, rubber, machinery, spare parts, computers, and electronic items.

Vietnam’s key imports from India are cattle feed, machinery, pharmaceutical products, and cotton.

How to tap potential?

Vietnamese commercial counselor to India Nguyen Son Ha said Vietnam’s export structure has been changing much for the better.

Many Vietnamese products are now available on the Indian market, such as rubber, computer hardware, electronic items, textiles and garments.

Easy access to cheap materials from India through the ASEAN-India Trade in Goods (AITIG) has helped Vietnamese manufacturers improve their production capacity and competitive edge.

In addition, India’s recognition of Vietnam’s full market economy status is expected to lay a firm foundation for the two countries’ trade and investment to develop in a sustainable manner.

Meria Khumar, Speaker for Lok Sabha (the Lower House of the Indian Parliament) considered Vietnam an important partner of India and a pillar of its Look-East policy.

Bilateral cooperation has expanded in various fields, especially in economics and trade, she said, adding that both sides should strengthen their ties to fully tap their potential and strengthen their relation.

Khumar highlighted the recent launch of a direct air route between India and Vietnam which she said will help promote bilateral cooperation in economic, tourism, and investment.

G.D Agarwal, President of the Vietnam-India Chamber of Commerce and Industry (IVCCI), was also in praise of the Vietnamese market, which is opening up many opportunities for Indian investors.

A representative from the Vietnamese Ministry of Industry and Trade (MoIT) stressed the importance of setting up representative offices in India to promote bilateral exchanges.

In early March, a delegation of 40 Vietnamese leading groups and companies attended the India-ASEAN Business Fair while 70 Indian businesses participated in the Vietnam Expo 2011 in April.

As approved by the Prime Minister, a Vietnam-India Business Forum has been put in place to offer opportunities for businesses from both countries to seek partners and share experience in business, investment, and cooperation.

How to promote cooperation?

MoIT Deputy Minister Nguyen Thanh Bien emphasized that Vietnamese businesses should take the initiative to put forward proposals and work closely with their Indian partners in order to reduce the trade deficit and boost exports.

He proposed that they get to learn more about the Indian market, customer taste and buying habits, as well as specific demands from their Indian partners.

It’s also very important to keep them upgraded about Vietnam’s huge potential for agricultural, aquatic, apparel, wood, and footwear products, Bien added.

Tran Quang Huy, Deputy Director of the MoIT’s Africa, Western and South Asia Market Department, urged Vietnamese businesses to invest more in renewing technologies to improve the quality of their products.