Trade relations between Vietnam and India

India and Vietnam, with historical roots in the common struggle for liberation from colonial rule and the national struggle for independence, share traditionally close and cordial bilateral relations. India initially maintained Consulate-level relations with the then North and South Vietnam and established full diplomatic relations with unified Vietnam on 7 January 1972.

Relations between the two countries were elevated to the level of ‘Strategic Partnership’ during the visit of Prime Minister Nguyen Tan Dung to India in July 2007. In Sep 2016, during Prime Minister Narenda Modi’s visit to Vietnam, the relations were further elevated to a “Comprehensive Strategic Partnership”

The two countries formed various institutional mechanisms for bilateral exchanges

There are many bilateral mechanisms at various levels between India and Vietnam, in which:

Agreement on Trade and Economic Cooperation between India and Vietnam signed on 26 Feb 1978 (and re-new on 08 March 1997), the two countries agree on Most Favoured Nation (MFN) each other.

1982, the two countries formed Việt Nam-India Joint Committee on Economic, Commercial, Scientific, and Technological Co-operation. This is important mechanisms for the development of bilateral cooperation, including building action plan every three years.

07/09/1994: Agreement between The Socialist Republic of Vietnam and the Republic of India for the avoidance of double taxation and the prevention of fiscal evasion with respect to taxes on income

08/03/1997: Agreement between the Government of the Republic of India and the Government of the Socialist Republic of Vietnam for the Promotion and Protection of Investments

ASEAN and the Republic of India went into the Framework Agreement on Comprehensive Economic Cooperation on October 8th, 2003. The Parties, on the basis of the Framework Agreement, signed an Agreement on Free Trade in Goods (effective on January 1st, 2010 – effective in Vietnam from 01 June 2010), an Agreement on Free Trade in Services (effective on July 1st, 2015) and an Agreement on Investment (effective on July 1st, 2015) with the aim of establishing an ASEAN – India Free Trade Area.

Vietnam – India Trade Relations through figures

Import – export turnover between the two countries increase rather fast, from 72 million USD in year 1995 to 1 billion USD in 2006 and up to 2,7 billion USD in 2010.

According to the Vietnam Customs, in 2018 import – export turnover between Vietnam and India reach 10.7 billion USD, nearly double that of 2016.

Currently, the two Governments set target to increase bilateral trade turnover to 15 billion USD in 2020.

IMPORT – EXPORT TURNOVER VIETNAM – INDIA

Unit: Million USD

Year	2010	2011	2012	2013	2014	2015	2016	2017	2018
Export	992	1,554	1,778	2,353	2,460	2,473	2,688	3,755	6,540
Import	1,746	2,346	2,159	2,882	3,132	2,656	2,710	3,877	4,150
Total trade	2,738	3,900	3,937	5,235	5,592	5,129	5,398	7,632	10,690
Trade balance	-754	-792	-381	-529	-672	-183	-22	-122	2390

It is noticed that in the past, Vietnam mainly suffer trade deficit with India, however, in 2018, there is big surplus of more than 2.3 billion USD. The main reason is Vietnam enterprise expand export market and due to ASEAN – INDIA FTA, customs duty from Vietnam to India reduce to 0% for many commodities.

Commodity Vietnam export to India in 2018

Commodity	Year 2018		+/- compared with 2017 (%)*
	Volumn (Ton)	Value (USD)	Volumn	Value (USD)
Total		6.542.350.652		74,20
Machinery, Tools, Spare parts, …		1.699.169.515		426,86
Computer, electronic products, accessories		800.835.624		63,04
Smartphones and accessories		814.309.611		49,16
Common metal and products thereof		577.960.154		23,49
Chemical		377.436.958		49,55
Rubber	102.921	145.392.197	85,53	60,49
Fibers and yarns of all kinds	33.268	131.115.837	-0,74	7,71
Steel products		187.874.846		170,19
Steels	212.157	174.105.501	32,50	36,95
Means of transport and spare parts		176.350.549		32,57
Shoes		103.678.481		52,68
Cashew	4.772	34.870.903	-14,11	-24,19
Seafood		28.047.179		33,22
Coffee	58.019	95.691.744	35,67	12,05
Tea	868	905.674	-49,94	-56,62
Pepper	20.3	62.629.619	24,83	-20,57
Confectionery and cereal products		842.283		52,58
Animal feed and raw materials		64.269.058		31,59
Coal	100.442	15.099.404	-40,76	-29,73
Chemical products		66.151.865		41,21
Plastic materials	25.842	31.717.272	1,86	9,42
Plastic products		48.191.800		135,91
Products from rubber		10.366.079		75,99
Rattan, bamboo, rush and carpet products		5.635.968		1.579,43
Wood and wood products		46.488.927		-22,80
Textiles		66.061.782		16,35
Textile, garment, leather and shoes materials		72.638.445		18,47

Source: Vinanet

Commodity Vietnam import from India in first 8 months 2019

Commodity	8 month 2019		+/- Compared with same period 2018 (%)*
	Volumn (Ton)	Value (USD)	Volumn	Value (USD)
Total		2.815.092.879		-0,24
Seafood		135.374.842		-45,86
Fruits, Vegetables		21.567.288		10,02
Wheat	1.135	325.338	2216,33	1350,39
Corn	1.639	1.366.477	-98,35	-94,32
Animal and vegetable fats and oils		2.559.950		-51,58
Animal feed and raw materials		125.625.578		-0,86
Tobacco raw materials		10.089.569		29,40
Ores and other minerals	138.634	16.654.525	-62,93	-62,26
Other products from petroleum		5.505.382		-23,23
Chemical		124.862.558		23,83
Chemical products		74.459.736		5,59
Pharmaceutical raw materials		47.572.804		1,77
Medicine		163.140.968		-5,66
Fertilizers	1.818	3.272.822	26,25	11,33
Pesticides and raw materials		48.557.902		-9,20
Plastic materials	80.543	96.728.403	-7,28	-17,10
Plastic products		12.370.103		18,75
Rubber products		6.137.020		4,10
Paper	32.081	30.875.433	21,75	1,05
Cotton	84.697	145.045.554	-57,40	-57,31
Fibers and yarns	28.395	66.951.396	-24,53	-29,53
Fabrics		45.508.798		1,54
Textile, garment, leather and shoes materials		66.731.398		-18,58
Precious stones, precious metals and products		88.530.205		-9,73
Steels	957.348	515.775.446	125,91	89,40
Steel product		21.567.231		15,05
Other Common metals	27.076	58.069.783	-8,49	-33,38
Computer, electronic products, accessories		53.941.194		172,97
Machinery, Tools, Spare parts, …		311.336.206		-1,43
Car components, spare parts		118.522.118		17,30
Other commodities		355.520.854

Source: Vinanet

Currently, Vietnam’s special preferential import tariff in period 2018 – 2022 under Asean – India FTA is stipulated in Decree No. 159/2017/ND-CP dated 27 Dec 2017 by Vietnam’s Prime Mister

For details of the Decree No. 159/2017/ND-CP, click Here

For more detailed advice on import procedures from India to Vietnam and export from Vietnam to India and shipping estimates, contact us:

Hp Global Company Limited

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