FTA to accelerate Indo-Vietnam trade

Vu Quang Diem, ambassador of Vietnam to India, recently revealed that bilateral trade between India and Vietnam is expected to receive a major impetus due to the inking of the free trade agreement (FTA) with the Association of Southeast Asian Nations (ASEAN).

The Memorandum of Understanding (MoU) signed between India and Vietnam in 2009 has also given a boost to the trade volumes between both countries. With agreements such as these being inked between officials of the two countries, both Indian and Vietnamese SMEs can reap major benefits.

Currently, trade between India and Vietnam is growing at the rate of 20% on a year-on-year basis and is likely to increase in the near-term. According to the official estimates, trade volumes in 2009 amounted to US$2.055 billion between both countries in which India occupied an export share worth US$1.635 billion.

Mobile phones, electronic components, spare parts, computers, coffee, ores and other minerals form some of the chief items of export from Vietnam, while its import basket includes pharmaceuticals, steel, spare parts and tobacco ingredients, among others. Keeping in mind their import requirements, Indian SMEs can cater to the Vietnamese market and further contribute in strengthening bilateral trade ties.

During a meeting organised by the Bharat Chamber of Commerce, Mr Diem revealed that investments to the tune of US$201.4 million via 41 projects have been made by Indian companies in Vietnam in 2009.

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