Focusing on the ‘Act East Policy’ and to enhance the Comprehensive Strategic Partnership, India has extended USD 500 million to Vietnam for defence cooperation. India and Vietnam recently signed 12 agreements that cover IT, space, double taxation and sharing white shipping information among others. The defence cooperation will strengthen the bilateral ties not only between the two nations, but more significantly, will connect the ASEAN region.
India believes that by elevating strategic ties to comprehensive partnerships will take bilateral relations to a new level and that indicates close association between India and Vietnam. Vietnam has strategic partnership with only Russia and China. Military cooperation between India and Vietnam will gather momentum after this development. Economic and defence cooperation between India and Vietnam is also expected to strengthen the ASEAN region globally.
India’s Larsen Toubro Ltd signed a pact with Vietnam to design and build vessels, and also provide technical assistance for ship building. Naval forces of the countries will also collaborate in sharing White Information System. India’s trade with Vietnam is worth USD 8 billion currently, and is expected to hit the USD 15 billion mark by 2020. India is also working to build oil and gas reserves off the Vietnam coast. India has already invested USD 1.8 billion in a thermal power project in Vietnam, making it one of the top 10 investors in the country. Discussions are also on for India to sell its supersonic Brahmos cruise missiles to Vietnam and also provide technical assistance for the maintenance of the hardware.
Implication of India-Vietnam ties on China
Vietnam wanted to strengthen their defence sector in the wake of China’s aggressive expansion in South China Sea. In this regard, growing India-Vietnam ties will act as a veiled caution to China. The South China Sea dispute has plagued the region for over a decade, with the impasse showing no signs of breaking. About 3.5 million square kilometres area is being disputed by China, Philippines, Vietnam, Brunei and Taiwan. China imposed its claim by building islands and using naval patrols. The vast mineral deposits in Paracel and the Spratly Islands offer lucrative economic interest for the countries to claim the territory on the South China Sea. India has been urging for freedom of passage in international waters which compromises China’s interest. Vietnam’s policy encourages international navies in the disputed South China Sea and India’s warships in Vietnamese ports create a possibility of a proxy war between India and China. Both the countries urged to respect United Nations Convention on the Law of Sea (UNCLOS) in maintaining peace, security and uninterrupted trade and commerce in the region. The regional dispute has become a global concern.