India and Vietnam Relations
Introduction: Why Vietnam Matters
Among all the countries of South East Asia, Vietnam occupies a uniquely trusted place in India’s strategic imagination. It is repeatedly described as a key pillar of India’s Act East Policy, and the relationship rests on a rare foundation of shared history, ideological affinity and mutual trust untainted by any conflict of interest.
What began as ancient trade and a fraternity forged in the anti-colonial struggle has matured, over seven decades, from a bond that was ideological in nature into one that is firmly economic-cum-strategic today.
Two forces drive the present convergence.
- The first is India’s own Act East Policy, which meets Vietnam’s outward-looking ‘Look West’ orientation at exactly the right point.
- The second is a shared concern about an increasingly assertive China — over land borders in India’s case, and over the South China Sea in Vietnam’s.
Together these have made the India-Vietnam partnership a potential axis in the emerging Asian balance of power.
| The Key Drivers at a Glance Strategic trust: a relationship free of any bilateral dispute, anchored in anti-colonial solidarity and non-alignment. China factor: shared concern over Chinese assertiveness — Himalayas for India, South China Sea for Vietnam. Defence: India’s deepest defence partnership in the region — MRO, training, lines of credit, warship transfers. Energy: hydrocarbon exploration in Vietnam’s waters, tying India directly to the South China Sea question. |
Historical Background
Contact between the two peoples reaches back to the second century BC, when Indian traders sailed to the Indo-China region, carrying with them Indian culture and ideas. Its greatest surviving monument is the cluster of Champa temples in Central and South Vietnam — enduring testimony to that civilisational diffusion.
In the modern era the bond was forged in a common national liberation movement. During and after the Second World War, both nations stood on a shared anti-colonial and non-aligned platform. When the US-Vietnam war broke out, India voiced strong solidarity — the slogan *’Amar naam, Tomar naam, Vietnam, Vietnam’* captured the popular mood, and India pressed for an end to US bombing and a settlement through the Geneva framework.
After the Paris Accords (1972) ended the war, India upgraded ties to ambassador level in 1972, and following Vietnam’s reunification in 1975 supported it through its subsequent conflicts.
A Bilateral Trade Agreement (1978) and a Bilateral Investment Promotion and Protection Agreement (BIPPA, 1997) institutionalised the economic relationship. Through the Cold War the two remained bound by the common ideology of non-alignment.
Evolution: From Ideology to Strategy
The end of the Cold War transformed the character of the relationship. India launched the Look East Policy (1991) and both countries opened their economies almost simultaneously — Vietnam’s reform programme being the celebrated Đổi Mới.
A shared feature emerged: both adopted a socialist economy with a tilt toward the market. India’s External Affairs Ministry created a dedicated CLMV division (Cambodia, Laos, Myanmar, Vietnam), and as India engaged ASEAN it used the platform to draw closer to Hanoi. The relationship’s centre of gravity thus shifted from ideology to commerce, and then to a robust strategic and defence partnership.
The Transformation of India–Vietnam Ties
| Cold War: IDEOLOGICAL — anti-colonial solidarity, non-alignment |
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| Post-1991: ECONOMIC — Look East, Đổi Mới, lines of credit, trade |
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| Today: STRATEGIC — Comprehensive → Enhanced Comprehensive Strategic Partnership |
Political and Strategic Partnership
The strategic architecture has been steadily upgraded. The two established a Strategic Partnership in 2007; during PM Modi’s 2016 visit it was elevated to a Comprehensive Strategic Partnership (CSP) — a status India reserves for only its closest partners.
The partnership has since been reinforced by the Joint Vision for Peace, Prosperity and People (2020) and, most recently, elevated further to an Enhanced Comprehensive Strategic Partnership, with an ambitious new trade target of $25 billion by 2030.
Vietnam has consistently affirmed its support for India’s Act East Policy, and India regards Vietnam as the focal point of that policy.
Defence Diplomacy — The Crown Jewel
Defence is the strongest and most distinctive strand of the relationship. Its evolution has been methodical, moving from memoranda to protocols to hardware and, finally, to the transfer of major platforms:
- Foundational agreements: an MoU on Defence Cooperation (1995) led to the India-Vietnam Defence Protocol (2000), with regular annual interactions at the level of the Chiefs of Army Staff and at the ASEAN Defence Ministers’ Meeting.
- Capability support: As both operate Russian-origin equipment, India provides maintenance, repair and overhaul (MRO) for Vietnam’s MiG-21 fleet and trains Vietnamese sailors in submarine operations (at INS Satavahana, Visakhapatnam), alongside ITEC scholarships.
- Lines of credit: India has extended defence lines of credit — including a $100 million LoC used to build 12 high-speed guard boats (with Larsen & Toubro) and a further $300 million LoC for coast-guard and patrol vessels.
- Landmark transfer: In a historic first, India gifted the indigenously built missile corvette INS Kirpan to the Vietnam People’s Navy — the first time India has handed over a fully operational warship to a friendly nation.
- Forward agenda: A Joint Vision Statement on Defence Partnership towards 2030 and a Memorandum on Mutual Logistics Support now frame future cooperation, with discussions on the sale of the BrahMos missile system reflecting the depth of trust.
Economic and Commercial Cooperation
Commerce, weak during the Cold War when both ran closed economies, has surged in the liberalisation era, propelled largely by Indian lines of credit — a flexible instrument India has repeatedly used to overcome Vietnam’s financing constraints.
India granted Vietnam Most Favoured Nation status as early as 1982, and the two also leverage the India-ASEAN FTA to deepen trade.
Bilateral trade reached about $14.8 billion in 2023-24, with both sides now aiming for $25 billion by 2030.
- Trade basket: India imports machinery, phone components, computers, electronic hardware, rubber and coffee; it exports meat, fish, cotton, corn and pharmaceuticals.
- Investment: Indian firms are active in oil, tea, sugar and power — including a major Tata Power investment in a thermal power project in Vietnam — and India has run scores of projects under its lines of credit.
Energy, Oil and the South China Sea
Energy cooperation places India directly at the heart of the region’s most contested waters.
India’s ONGC Videsh Limited (OVL) has partnered PetroVietnam in a joint venture for exploration, operating in offshore blocks 128, 152 and 153 — including in the Nam Con Son basin off Vietnam’s coast.
Vietnam invited India into its Exclusive Economic Zone (EEZ), and India maintains that its presence is fully legal under the UN Convention on the Law of the Sea (UNCLOS) and driven by its energy-security interest — not by any desire to contain China. China, which claims almost the entire sea, has objected.
Understanding the South China Sea Dispute
China asserts a sweeping historic claim through its nine-dash line, and since 2010 has treated the sea as a ‘core national interest’ — a matter for which it would go to war. Despite agreeing to a Declaration on the Conduct of Parties (2002), it has pursued island-building and militarisation (Fiery Cross, Johnson South and other reefs), converting features into artificial islands with airstrips.
In 2016 the Permanent Court of Arbitration (PCA) ruled against China’s claims in a case brought by the Philippines — a verdict China rejected but which vindicated the position India and Vietnam share.
| Feature | Claimant States |
| Paracel Islands | China, Taiwan, Vietnam |
| Spratly Islands | China, Taiwan, Vietnam, Brunei, Philippines |
| Scarborough Shoal | China, Taiwan, Philippines |
| From the 11-Dash Line to the 9-Dash Line In 1947 China drew an eleven-dash line to mark its claims over islets vacated by Japan after WWII. During the 1950s, in a gesture of communist fraternity, China dropped two dashes near the Gulf of Tonkin — producing today’s nine-dash line — around the same time it ceded Bailongwei island to North Vietnam (1957). India’s position: if global non-proliferation rules could not be bent for India (as at the NSG), then UNCLOS cannot be bent for China — and freedom of navigation must be upheld. |
Science, Technology, Space and Capacity Building
- Space: Under a 1988 S&T agreement, ISRO is establishing a satellite tracking and data-reception centre in Ho Chi Minh City, supporting Vietnam’s earth-observation and surveillance needs.
- Emerging tech: Cooperation extends to cyber security, ICT, nuclear energy and outer space, with MoUs on counter-terrorism, transnational crime and disaster management.
- Capacity building: India runs ITEC training, English-language and diplomat-training programmes, and has set up software and English-training centres in Vietnam.
Cultural and People-to-People Ties
Buddhism is the great civilisational connector. Vietnamese leaders visiting India have made a point of travelling to Bodh Gaya, members of the Buddhist Sangha of Vietnam receive scholarships to study Sanskrit in India, and cooperation extends to traditional medicine and health.
Vietnam also participates in the Mekong-Ganga Cooperation (MGC), and India supports quick-impact community projects there — weaving the relationship into a broader sub-regional fabric.
The India–Japan–Vietnam Minilateral
A significant recent trend is the rise of minilateral security networks. India, Japan and Vietnam increasingly cooperate — Japan and Vietnam in cyber security, space and naval modernisation — with the common thread being concern over China.
As the old US-centric hub-and-spoke alliance system has failed to generate cooperation among partners like Japan, South Korea, Australia and Vietnam, these flexible, issue-based coalitions are emerging as the likely architecture of a future Asian security order — with India-Vietnam a natural nucleus.
Issues and Challenges
- The China constraint: Both must manage deep economic ties with China even as they hedge against it. Beijing’s assertiveness in the South China Sea directly threatens India’s energy projects and Vietnam’s security.
- Trade imbalance and modest scale: Trade, though growing, remains skewed in Vietnam’s favour and small relative to Vietnam-China trade; realising the $25-billion target will require deeper market access.
- Slow project execution: Indian lines of credit and connectivity initiatives have often been slow to translate into completed projects on the ground.
- Defence deliverables: High-value transfers such as the BrahMos sale have taken time to conclude, testing the momentum of an otherwise flagship defence relationship.
- Connectivity gaps: Limited direct air and shipping links continue to cap trade, tourism and people-to-people exchange.
Way Forward
- Scale up trade and investment: work purposefully toward the $25-billion-by-2030 target, easing market access and encouraging Indian investment in energy, manufacturing and digital sectors.
- Conclude high-value defence deals: finalise platforms such as BrahMos and deepen MRO, training and maritime-domain-awareness cooperation.
- Consolidate the maritime partnership: sustain energy cooperation in Vietnam’s EEZ while jointly championing UNCLOS, freedom of navigation and a binding Code of Conduct in the South China Sea.
- Strengthen minilaterals: institutionalise India-Japan-Vietnam and similar coalitions as pillars of a stable Indo-Pacific.
- Boost connectivity and culture: expand direct flights and shipping, and leverage the shared Buddhist heritage and MGC to broaden the human foundation of the partnership.
Conclusion
The India-Vietnam relationship is among the most trusting and least encumbered of all India’s partnerships — a bond that has travelled from ancient trade and anti-colonial fraternity to a full Enhanced Comprehensive Strategic Partnership.
Its key drivers are durable: a rare absence of any bilateral dispute, a converging response to Chinese assertiveness, a defence partnership deep enough to see India gift a warship, and an energy stake that ties India directly to the future of the South China Sea.
Challenges of scale, execution and the ever-present China constraint remain real. But as the Asian order shifts toward flexible, trust-based coalitions, few partnerships are as naturally suited to shaping it as that between India and Vietnam — two nations whose histories, and now whose strategic futures, point in the same direction.