The year 2020 marks the 42nd anniversary of India-Vietnam bilateral trade relations. Both these countries share strong bilateral relations and for the past two decades, trade between the two countries has been rising considerably.

Vietnam has emerged as the 18th largest trading partner of India, while the latter ranks seventh among Vietnam’s largest trading partners. As per the India Export Data, key exports to Vietnam include meat & fishery products, corn, steel, pharmaceuticals, cotton and machinery.

Vietnam Import Data epitomizes key imports from India include IT services, pharmaceuticals and oil and gas, electrical machinery & equipment, natural rubber, electronics components, chemicals, coffee, mobile devices and computer technology.

Vietnam is becoming the leading choice for major companies looking to set up their new manufacturing hubs and expand their supply chains. The country has strengthened the confidence of investor with quick and effective containment of the unprecedented Corona Virus pandemic.

A large middle class population of India and its custom duty exemption for ASEAN products make it an alluring destination for Vietnamese exports. The increasing importance of Vietnam in global supply chains has the potential to strengthen India- Vietnam ties further. There are many Indian projects in Vietnam focusing on sectors including mineral exploration, energy, agrochemicals, tea, sugar, manufacturing, IT, coffee and auto components.

Several major Indian business organizations have shown interest in venturing in Vietnam. Vietnam provides many lucrative reasons which include increased access to markets, favourable investment policies, free trade agreements, economic growth, low labour costs political stability and young and hard-working labour force for Indian investors to invest.

As per the India Import Data, Vietnam exports to India have the potential to grow by 10% annually or approximately US$633 million. This projected growth is primarily focused on goods export and services.

Thanks to the free trade agreements with several countries including India, Vietnam is an attractive destination to produce and export. The agreement allows the products to be exported to these countries with attractive low tariffs.

As both India and Vietnam look to bounce back after pandemic, their bilateral relationship remains strong with noteworthy prospects estimated at US$1.1 billion in bilateral trade volume.

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