The Hindu Business Line : Vietnam keen on greater trade ties with India

Participating in an interactive session organised by the Merchants Chamber of Commerce, Mr Ton Sinh Thanh, said there was an urgent need to correct trade imbalance through greater co-operation, under which more Vietnamese products could be exported to India.

Kolkata , Jan 1

THE Socialist Republic of Vietnam has sought greater economic co-operation with India, particularly on the trade front, to reduce the huge trade imbalance now faced by that country vis-à-vis India in 2002.

Lowering of tariff levels has also been sought to help correct this trade imbalance. In 2002, Vietnam imported from India items worth $ 300 million, while exporting a mere $ 30 million.

Participating in an interactive session organised by the Merchants Chamber of Commerce here, Mr Ton Sinh Thanh, Minister Counsellor and Deputy Chief of the Embassy of Vietnam in India, New Delhi, said there was an urgent need to correct this imbalance through greater trade co-operation, under which more Vietnamese products such as food products, spices, furniture, ceramics, construction equipment and dairy products could be exported to India.

He also suggested that the current tariff regime being adopted by India, on the higher side, was a bit of a problem to such enhancement of two-way trade. Vietnam participated as a "Partner Country" in the recently concluded 17th Industrial India Trade Fair 2003, Kolkata. A 12-member business delegation from Vietnam is now touring India.

While our country, which has ancient cultural links with India, is now cooperating in many areas of mutual interest such as science and technology and education, trade is still a problem area, and this needs to be addressed upfront tin future joint business meetings, Mr Thanh pointed out.

Citing the growing economic strengths of the country, which has been averaging a growth of nearly 6.7 per cent during the last 5 years, Mr Thanh urged Indian businessmen to look more closely at joint venture investments in Vietnam. Vietnam is a major exporter of rice, marine products, garments, oil & gas, coal, construction material and ceramics to other countries in Asia, including Japan and China.

Among the country's major items of import are machinery, fine chemicals, fertiliser, drugs and pharmaceuticals, electronics and electrical items. The country produces nearly 20 million tones of coal annually, and exports close to 7 million tonnes, mainly to China. Replying to a query, the trade official said Vietnam was now preparing for an entry into WTO, hopefully by end 2005. "We are getting ready for a rule-based global trading system," he pointed out.

According to Mr K.B. Agarwala, President of the chamber, the two-way trade between India and Vietnam for 2003-04, up to October end, was around $ 402 million, out of which India's imports was only $ 30 million. The major items exported to Vietnam in recent years were drugs, pharmaceuticals and fine chemicals (18 per cent), plastics and linoleum (14 per cent), machinery & instruments (19 per cent), rubber goods & footwear (7 per cent) and marine products (5 per cent).

The main items of import are spices (14 per cent), electronic goods (10 per cent), tea (8 per cent), essential oils and cosmetics preparations (6 per cent), natural rubber (5 per cent) and non-ferrous metals (4 per cent).

Pointing out that India-Vietnam trade has still not reached its full potential, Mr Agarwala said it was, however, encouraging that India's exports to Vietnam during April-September 2003, particularly of items such as plastics materials, electronics and computer components, machinery and spare parts, material for textile, garment and leather industries, iron & steel and pharmaceuticals, have gone up by 55 per cent.

He said besides oil and gas, where ONGC has substantial investments in the Indo-Vietnamese joint venture of Petro-Vietnam, Indian investments in other areas of sugar, power generation, edible oil and plastics in Vietnam were to the tune of $ 125 million.