Consulate General of India

Ho Chi Minh City, Vietnam

Trade & Economic Relations

INDIA-VIETNAM TRADE AND ECONOMIC RELATIONS

India and Vietnam have long standing trade and economic relations which have steadily grown over a period of time. From a meager USD 200 million in the year 2000, bilateral trade grew to USD 15 billion in 2022. According to Indian data during 2022-2023, bilateral trade reached USD 14.70 billion, registering an increase of 3.98%. India exports to Vietnam reached USD 5.91 billion while Indian imports from Vietnam amounted to USD 8.79 billion. According to the General Department of Vietnam Customs, bilateral trade between India and Vietnam reached USD 15.04 billion registering an increase of 13.92% in 2022. Exports by India reached USD 7.08 billion growing by 1.95% while imports by India amounted to USD 7.96 billion increasing by 27.20%.

Key items of exports from India to Vietnam include iron and steel, electrical machinery and equipment, machinery and mechanical appliances, auto components, meat and fishery products, cereal, maize, cotton, chemical and chemical products, ordinary metals, gems & jewelry, pharmaceuticals and ingredients as well as animal fodder & materials. Key items of imports into India from Vietnam are electronics and electrical goods, metals and articles of metals, chemicals, machinery and mechanical parts, articles of steel, plastic articles, coffee and tea, footwear, rubber articles, fertilizers and silk.

Existing bilateral institutional mechanism on economic, trade and investment promotion includes the Joint Trade Sub-Commission, Joint Working Groups on Agriculture, Healthcare, Information Technology and Joint Sub-Committee on Science and Technology. The 5th meeting of the Sub-Committee on Trade was held in New Delhi in August 2023 that reviewed the bilateral trade and investment relations. The second JWG on agriculture was held on 7 June 2023 to explore cooperation in the agriculture and fishery sector including facilitation of agriculture trade. The first Joint Working Group on Health Corporation was organized in virtual mode in August 2021 that had exchange of information on pandemic management, digital health, pharmaceutical cooperation, traditional medicine, medical tourism and public health strategies. The 3rd meeting of the Joint Working Group Meeting on Information Technology was held in virtual mode between the Ministry of Electronics and Information Technology of the Republic of India and the Ministry of Information and Communications of Vietnam in July 2021. The meeting focused on sharing information/best practices on digital transformation/mission, innovation and start-up ecosystem, cyber security, and capacity building activities.

Bilateral trade profile for the last few years is shown below.

For detailed trade statistics, please visit the website of Department of Commerce, Government of India at:https://commerce.gov.in/InnerContent.aspx?Type=TradeStatisticsmenu&Id=254
Review of India-ASEAN Trade in Goods Agreement (AITIGA)
The review of India-ASEAN Trade in Goods Agreement (AITIGA) was launched by the 19th ASEAN-India Economic Ministers’ Meeting held in Cambodia in September 2022. The Ministers endorsed the Scope of the Review and activated the AITIGA Joint Committee to undertake the review of AITIGA expeditiously. In the 20th ASEAN-India Economic Ministers’ meeting held on 21 August 2023 in Indonesia, the Ministers endorsed the roadmap for India-ASEAN Trade in Goods Agreement (AITIGA) review, Term of Reference as well as Work Plan of the AITIGA. The Ministers agreed to follow a quarterly schedule of negotiations and conclude the review in 2025.India ASEAN Trade in Goods Agreement (AITIGA) was signed on 13 August 2009. India and ASEAN registered a two-way trade of USD 131.5 billion in 2022-23 accounting for 11.3% of India’s global trade in 2022-23. The trade between Vietnam and India increased to USD 15 billion in 2022 as per Vietnamese data registering a growth of 13.92% over the previous year. India’s exports to Vietnam amounted to USD 7.08 billion while exports by Vietnam to India stood at USD 7.96 billion. An upgraded AITIGA in the near future is expected to be more user-friendly, simple, and trade facilitative for businesses, as well as responsive to the current global and regional challenges including supply chain disruptions. The review of the AITIGA would make trade between India and ASEAN countries including Viet Nam to be more facilitate and mutually beneficial.

Investments in both countries
Indian Investments in Vietnam are estimated at around USD 2 billion including investments routed through third countries. According to Vietnam’s Foreign Investment Agency, India has 378 projects with the total investment capital of 1.07 billion in Vietnam. Major sectors of Indian sectors are energy, mineral processing, agro-processing (coffee, tea, sugar), IT, auto components, pharmaceuticals, hospitality and infrastructure. According to the Department for Promotion of Industry and Internal Trade of India, Vietnam has invested about USD 5.46 million in sectors like consumer goods, electronic, constructions, IT, pharmaceuticals etc.

Development Partnership
India has a long-standing development partnership with Vietnam that has made positive contributions towards capacity building and socio-economic development of Vietnam. India has also been providing assistance to Vietnam within the ASEAN framework. Under the Mekong Ganga Cooperation (MGC) framework, India has been taking up Quick Impact Projects (QIPs), each valued at USD 50,000, in different provinces of Vietnam for development of community infrastructure. With their short gestation period, the QIPs bring direct benefits to communities at the grassroots level. During the virtual summit between the Prime Minister of India and Vietnam on 21 December 2020, the number of QIPs project has been increased from 05 to 10 per year to be implemented annually in Vietnam. So far, since 2017, 46 projects have been sanctioned in 39 provinces of Vietnam out of which 37 have already been completed and 9 are under implementation. India has also completed technical assistance worth USD 2.25 million for conservation and restoration of ancient Cham monuments located in the Quang Nam Province of Vietnam, showcasing the deep civilizational connection between the two countries.