A car assembly line of VinFast. (Photo: VNA)

Nguyen Anh Tuan, Deputy Director of the Foreign Investment Agency (FIA) at the Ministry of Planning and Investment (MPI), pointed out that investment ties between Vietnam and India have yet to match their potential.

India’s investment accounts for only 0.2% of the total FDI in the Southeast Asian nation, he told the India-Vietnam Business Meet on Auto Sector held recently in Hanoi.

Indian Ambassador Pranay Verma said the 800-member Automotive Component Manufacturers Association of India (ACMA) wanted to explore investment opportunities in Vietnam.

Nguyen Thi Thu Ha, General Director of Invest Global, which offers consulting services, stressed that Vietnam has great potential to boost the auto industry, which is expected to significantly contribute to the national economy.

However, the number of Vietnamese suppliers in the sector remains limited, and only a few of them are part of the country’s supply chain for producers and assemblers.

A deal between the Vietnamese and Indian auto sectors would be reciprocal, Ha said, adding that a number of Indian firms are already operating effectively in Vietnam, such as Minda, Spark Minda and Star Engineering.

Sharing Ha’s view, Dang Hoang Mai from the Vietnam Institute of Strategy and Policy for Industry and Trade said Vietnam has the potential to expand the market for electric vehicles as its car ownership is just 2.3%, equivalent to one tenth and one twentieth of Thailand and Malaysia, respectively.

Vietnam aims to attract major businesses and groups, with priority given to high-tech, support industries, innovation and digital economy, Tuan said, emphasising that it is suitable time for Indian investors to join the Vietnamese auto sector and its support industry.