NEW DELHI: As Vietnam hopes to reduce its dependence on the Chinese economy, its Prime Minister will land on the Indian soil later this month, marking an unprecedented level of intensity of interaction between the two countries - three high-level visits in three consecutive months.
Vietnamese Prime Minister Nguyen Tan Dung will arrive at Bodh Gaya on October 28 and then a day later travel to Delhi for formal, substantive meetings.
It takes place just a month after President Pranab Mukherjee was on a four-day visit to the country on September 14. And in August, External Affairs Minister Sushma Swaraj had marked the Modi Government’s first engagement with Hanoi.
While defence ties had been a dominant theme earlier for both the countries, this time the mood is distinctly economic.
According to sources, Vietnamese PM’s visit will focus on building more bridges with India, so as to sources materials and reduce its dependence on China. The sector specifically that Hanoi is looking at India is textiles.
With tensions escalating over south china sea dispute, Vietnam had seen riots on its streets which targeted Chinese business, and forced it to pay compensation for their loss later. It is a very lopsided balance of trade, with Vietnam importing most of its raw materials from China, especially for its emerging garment sector. Apparently 50 percent of the raw yarn and fabrics are imported from Chinese firms.
With textiles now seen as an important export industry for Hanoi, it wants to reduce this Chinese leverage which could impact its economy.
“They are looking to import more polyester fabrics and yarns from India. Even though the timelines given by Chinese firms are shorter, they are looking at India to diversify for obvious reasons,” said sources.
Incidentally, Vietnam’s trade with China was around $50 bn in 2013, while with India it was about $8 bn. At the same time, growth in trade volume with India has been sharp - 30 per cent over last year. The visit also comes after India for the first time in a bilateral document with US talked about the South China sea dispute and the rule of law for a peaceful region, which led to a sharp retort from Beijing that no third-parties had any role.