TPP spurs Indian trade
TPP spurs Indian trade
More Indian investments are expected to enter Vietnam in the near future to benefit from the Trans-Pacific Partnership.
In mid-July, 41 firms under India’s Council for Leather Exports (CLE) paid a working visit to Ho Chi Minh City to research the market and find partners.
Last year, 20 Indian delegations came to Vietnam to scout for investment opportunities focusing on a wide range of sectors such as energy, agriculture, support industries, footwear, and garments, according to Smita Pant, consul general of India.
“A growing number of Indian firms are seeing Vietnam as an appealing investment destination with the arrival of the Trans-Pacific Partnership (TPP), signed early this year and expected to take effect in 2018,” Pant said.
CLE’s chairman M. Rafeeque Ahmed said that India was the second largest global producer of footwear, with an annual output of over 2.2 billion pairs, while Vietnam was the fourth largest footwear producer worldwide.
“Thus, Vietnamese and Indian companies should join forces to enhance competitiveness in the international market, especially high-end and self-designed products that can yield more value-added benefits than outsourcing.”
He also called for Vietnamese footwear firms to invest in manufacturing facilities in India to cater to the large local Indian market, which is estimated to reach $6.5 billion this year and expected to hit $12 billion by 2020.
As Indian investors are flocking to Vietnam, Bank of India has opened its first branch in Vietnam with a capital volume of $15 million. This move is expected to increase the two countries’ trade activities and facilitate investors’ entry to the Vietnamese market.
This bank opened its representative office in Ho Chi Minh City in 2003 and received a foreign bank license in 2015, to become the first Indian bank to commence operation in Vietnam.
“The opening of a Ho Chi Minh City branch will cater to the needs of exporters and importers of Vietnam and India. It also plays a pivotal role in achieving the bilateral trade target of $15 billion, set by the leaders of both countries, by 2020,” said Shri Melwyn Rego, the bank’s managing director.
The bank branch will support Indian firms presently investing in Vietnam. For example, India’s Tata Power is speeding up procedures to implement the Long Phu 2 coal-fired power plant in the Mekong Delta province of Soc Trang.
“If the $2.1 billion project becomes a reality, India will become one of the biggest investors in Vietnam,” Pant noted.
India is one of the top 10 trading partners for Vietnam, which is ranked 24th amongst India’s trading partners. The two nations’ bilateral trade has seen continuous growth over the past few years. According to the Indian government’s data, trade volume between the two nations exceeded $9 billion in the financial year of 2014-2015, achieving the target of $7 billion well in advance of 2015. Indian businesses have invested over $1.1 billion in more than 100 projects in Vietnam.
