India Vietnam Relations

BackgroundIndia supported Vietnam's independence from France, opposed U.S. involvement in the war and supported unification of Vietnam. India established official diplomatic relations in 1972 and maintained friendly relations, especially in wake of Vietnam's hostile relations with the People's Republic of China, which had become India's strategic rival.[2]

[edit] Development of bilateral and commercial tiesIndia granted the "Most Favoured Nation" status to Vietnam in 1975[2] and both nations signed a bilateral trade agreement in 1978 and the Bilateral Investment Promotion and Protection Agreement (BIPPA) on March 8, 1997.[3] The Indo-Vietnam Joint Business Council has worked to promote trade and investment since 1993. In 2003, both nations promulgated a Joint Declaration on Comprehensive Cooperation when the General Secretary of the Communist Party of Vietnam Nong Duc Manh visited India and both nations are negotiating a free trade agreement.[2][4][5] In 2007, a fresh joint declaration was issued during the state visit of the Prime Minister of Vietnam Nguyen Tan Dung.[6] Bilateral trade has increased rapidly since the liberalisation of the economies of both Vietnam and India.[2] India is the 13th-largest exporter to Vietnam, with exports have grown steadily from USD 11.5 million in 1985-86 to USD 395.68 million by 2003.[3] Vietnam's exports to India rose to USD 180 million, including agricultural products, handicrafts, textiles, electronics and other goods.[1] Between 2001 and 2006, the volume of bilateral trade expanded at 20-30% per annum to reach USD 1 billion by 2006.[4][7] Continuing the rapid pace of growth, bilateral trade is expected to rise to USD 2 billion by 2008, 2 years ahead of the official target.[5][7] India and Vietnam have also expanded cooperation in information technology, education and collaboration of the respective national space programmes.[6] Direct air links and lax visa regulations have been established to bolster tourism.[8]