The Vietnamese Defence Minister, General Phung Quang Thanh’s visit to India from 4 - 8 November 2009 is seen as an effort to buttress and intensify bilateral ties between India and Vietnam, which have withstood post Cold War strategic permutations. The relationship is destined to be more economically and strategically oriented in the near future. Like an old wine, the relationship has matured and become multifaceted over the course of time.  Both countries have become the propellers of the Asian economy with their GDP growth rates being among the highest in Asia.  There is surely potential for more cooperation. This visit is seen as a milestone in furthering defence cooperation between the two countries, through annual defence dialogue. The visit was preceded by the first strategic dialogue between the two nations in October 2009. While rising powers like China have utilized their strategic leverage vis-à-vis India’s neighbours, India has been reluctant in pursuing its strategic objectives in a more pronounced manner.

The signing of the Strategic Partnership Agreement in 2007 showed the new contours of India-Vietnam relations. Within the academic community and among strategic thinkers a consensus is emerging that India must use its military might to safeguard its commercial interests. India’s position with regard to Vietnam and  the way in which it is going to nurture its relations with Vietnam remains a mystery. Dr Manmohan Singh’s meeting with Vietnamese President Nguyen Minh Triet on the sidelines of the Sharm el-Sheikh Summit in Egypt in 2009 is proof that Vietnam is vital for India's 'Look East' strategy.  As per 2008 data, Vietnam-India trade amounts to US$2.8 billion but due to the skewed trade balance in India’s favour Vietnam has been seeking trade and tariff concessions from India. This emerged as a bone of contention during the signing of the India-ASEAN Free Trade Agreement (FTA) when Vietnam demanded market economy status from India.  India being aware that  more than 70 per cent of anti-dumping cases against Vietnam have been verified by the World Trade Organisation (WTO), was in denial mode. However, in October 2009, it granted market economy status to Vietnam. India has been looking for cooperation in education, science and technology and higher education. On the basis of discussions taking place within India’s academic and strategic core, it seems that the stress is on reconfiguring India’s approach towards Vietnam.

What should the policy prescriptions for the India-Vietnam relationship be? With Vietnam becoming the Chair of ASEAN in 2010, multilateral organizations need to be strengthened in Southeast Asia. China should also be involved in a constructive manner.  India should engage Vietnam because of  low costs and its high literate population. It must take the initiative to build up the human resource capabilities of Vietnam through vocational training and English language training. The two countries should iron out differences with regard to the fee structure of Indian institutions in Vietnam and should look for technical education and IT skills based training for the Vietnamese population. Vietnam should take concrete steps to liberalize its financial and equity markets for investment opportunities. India should look for investment prospects and make a cost-benefit analysis of the investments that have been made in Vietnam. As India has already invested in mineral exploration and strategic sectors like steel and cement, Vietnam should provide the necessary infrastructure for furthering investment opportunities for Indian companies. India should study Vietnamese ship building facilities and look for possible joint ventures. Vietnam could be used as a lever to look for investment and development opportunities in the Indochina region, which translates into more focused attention in Laos and Cambodia. India could also look for a supply of anthracite coal from Vietnam on a long-term basis in order to diversify its import portfolio.

Vietnam’s defence equipment is becoming outdated, so India should help in upgrading its military hardware. India should send technicians and fighter pilot trainers to Vietnam in the future. Vietnam and India use the same Russian and erstwhile Soviet platforms so there is a possibility of selling aircraft spares and engine oils to Vietnam. There is a need for creating a database of aircraft spares and inventories to be shared with Vietnam on a real time basis.  India must conduct more bilateral exercises with Vietnam for theatre awareness as well as engaging the Vietnamese Navy in exercises in the South China Sea. Time and again Indian exploration interests near the Vietnamese coast have been threatened by China by diplomatic means and through the media but India must protect its national commercial interests abroad. India should look to export non-lethal military equipment and communication sets to Vietnam. Both countries can look for greater engagement between the Vietnam Marine Police and Indian Coastguards in anti-piracy operations as well as developing coordination. There is a growing need among Indian decision makers for engaging Vietnam in a more comprehensive way. Vietnam is a country with immense economic and strategic potential. The time is ripe for India to devise a specific Indochina policy because clubbing Vietnam into the Look East policy will not yield many dividends, if India wishes to have a strategic presence and a more benign status in the region.