India is trying to establish new supply chains to overcome the consequences of COVID-19 and Vietnam is considered a partner of potential, said Sanjaya Baru, former Secretary General of Federation of Indian Chambers of Commerce and Industry.

Vietnamese and Indian businesses signed a number of cooperation deals at the Vietnam-India Business Forum held in New Delhi last December (Photo: VNA)

According to the Center for the World Trade Organisation and International Trade at the Vietnam Chamber of Commerce and Industry, Vietnam is an attractive market due to being a signatory to a number of free trade agreements.

“India and Vietnam can work together on establishing new supply chains so that Indian exports to Southeast Asia and East Asia can be enhanced through joint ventures,” Mr. Baru said.

At the Vietnam-India Business Forum in New Delhi last December, the two countries signed 12 cooperation agreements in various fields, including human resources training in information technology, oil and gas processing and energy, and trade and investment promotion activities.

Meanwhile, Jagannath Panda, Head of the Stockholm Center for South Asian and Indo-Pacific Affairs, described Vietnam as an important country in Southeast Asian and Indian supply chain networks.

He lauded Vietnam-India relations, which have been progressing well and developed into a comprehensive strategic partnership in 2017.

A turning point in relations was the initiation of India’s Look East policy in 1991, aiming to cultivate extensive economic and strategic relations with Southeast Asian countries, according to Amitendu Palit, Senior Research Fellow at the Institute of South Asian Studies under the National University of Singapore.

The success of the Look East policy encouraged India to make it more action-oriented, resulting in India’s Act East policy, which was announced in 2014.

These policies have made India become much more outward looking, Mr. Palit said, adding that its relations, particularly economic partnerships with Southeast Asia, have expanded rapidly.

ASEAN and India elevated their relationship to a strategic partnership in 2012 on the occasion of the 20th anniversary of the ASEAN-India Dialogue Relations.

In the context of economic globalisation and regional integration, the two sides have encouraged further cooperation in support of sub-regional development within the frameworks of Mekong-Ganga Cooperation (MGC).

At the 19th consultation meeting on economic cooperation between ASEAN and India in Cambodia on September 16, participants called on the two sides to forge collective action in securing robust supply chain connectivity to maintain the flow of essential goods and services.

Within the relationship between ASEAN and India, relations between India and Vietnam have always enjoyed a very special position, Mr. Palit said.

“There are a lot of commonalities between the two countries,” he added. “Both have had challenges with poverty and unemployment, and now also face difficulties from the COVID-19 pandemic.”

Despite the serious impact of COVID-19, Vietnam-India trade recorded impressive growth in 2021, surpassing 13 billion USD for the first time, up 36.5 percent compared to 2020, according to the General Department of Vietnam Customs.

Mr. Palit suggested that Vietnam and India look closely at the possibilities for cooperation through a large number of supply chains.

“What I have in mind is a large number of products and supply chains making up our production networks, where countries and businesses come together to cooperate,” he explained.

He believes the two countries can discover complementarities in a number of fields, such as agriculture, chemicals, and textile and garment, and more advanced endeavours like artificial intelligence.

According to Indian analysts, following the COVID-19 pandemic, there is a lot of focus on Vietnam and India, as both countries are critical economic zones for new supply chain connections.

They highlighted Vietnam’s strategic location and its crucial role in India’s Indo-Pacific vision, which sees the region as essentially a free and open economic area with the protection of sea lines of communication.

The analysts said both Vietnam and India can complement each other in the Indo-Pacific supply chain network.