Background and Context

The State Visit of the President of Vietnam to India in May 2026 coincided with the 10th anniversary of the establishment of the Comprehensive Strategic Partnership in 2016. This visit marked a significant milestone in bilateral relations, with India reaffirming Vietnam as a key pillar of its Act East Policy and Vision SAGAR (Security and Growth for All in the Region).

Evolution of India-Vietnam Ties:

  • 2007: Strategic Partnership established
  • 2016: Elevated to Comprehensive Strategic Partnership
  • 2026: Further upgraded to Enhanced Comprehensive Strategic Partnership

Key Highlights of the State Visit

Elevation of Bilateral Ties

The relationship has been officially upgraded to an "Enhanced Comprehensive Strategic Partnership" — the third major elevation in less than two decades.

Economic and Trade Cooperation

  • Bilateral trade crossed USD 16 billion in 2025-26
  • India exports engineering goods, pharmaceuticals, and raw materials
  • India imports electronics, machinery, and high-value goods
  • Both nations set an ambitious target of USD 25 billion by 2030
  • Agreed to accelerate review of ASEAN-India Trade in Goods Agreement (AITIGA) by end of 2026

Defense and Maritime Security

  • Vietnam formally joined India's Indo-Pacific Oceans Initiative (IPOI)
  • Leaders committed to expanding defense procurement
  • India offered MRO (Maintenance, Repair, Overhaul) support for Vietnam's military platforms:
  • Su-30 fighter jets
  • Kilo-class submarines
  • Both nations emphasized:
  • Freedom of navigation
  • Peaceful resolution of disputes under UNCLOS (1982)
  • Swift conclusion of binding Code of Conduct (CoC) in South China Sea

Rare Earths and Critical Minerals

  • MoU signed between IREL (India) Ltd. and Institute for Technology of Radioactive and Rare Elements (ITRRE) of Vietnam
  • Focus on extraction and processing of rare earth elements
  • Strategic importance for clean energy, defense electronics, and advanced manufacturing

Digital Connectivity

  • MoU between NPCI International Payments Limited (NIPL) and Vietnam's NAPAS
  • Enables cross-border QR code interoperability for seamless digital payments
  • RBI and State Bank of Vietnam collaborating on digital financial innovation

Healthcare and Pharmaceuticals

  • Agreement between India's CDSCO and Vietnam's Drug Administration of Vietnam (DAV)
  • Eases regulatory bottlenecks
  • Improves market access for Indian pharmaceutical products

Culture and Educational Cooperation

  • Renewed Cultural Exchange Programme (2026-2030)
  • Establishment of ICCR Chairs of Indian Studies in Vietnamese universities
  • Agreement on digitization and conservation of Cham manuscripts preserved in Vietnam

Agriculture

  • Market access granted for Indian grapes to Vietnam
  • Vietnamese Durian to India

Current State of India-Vietnam Relations

Trade and Economy

  • Bilateral trade exceeded USD 16 billion in 2025-26

Defense Partnership

  • Guided by Joint Vision Statement 2030
  • Mutual Logistics Support MoU in place
  • India gifted missile corvette INS Kirpan to Vietnam
  • Bilateral peacekeeping exercise VINBAX conducted regularly

Development Cooperation

  • Quick Impact Projects (QIPs) under Mekong Ganga Cooperation (MGC)
  • Archaeological Survey of India (ASI) restoration projects at My Son (UNESCO World Heritage site)

Humanitarian Assistance

  • Operation Sadbhav launched September 2024 for emergency relief following Typhoon Yagi

Strategic Importance of Vietnam to India

Geopolitical Fulcrum

  • Vietnam strategically located in South China Sea
  • Over 50% of India's trade passes through this maritime route
  • Vietnam's resistance to regional hegemony makes it a natural partner
  • Both share vision for multipolar Asia

Economic Diversification

  • "China-Plus-One" strategy has made Vietnam a major manufacturing hub
  • Closer integration allows Indian industries to plug into ASEAN and global value chains

Energy Security

  • ONGC Videsh Limited (OVL) has investments in oil and gas exploration blocks in Vietnam's EEZ
  • Critical for India's energy security

Counter-Terrorism and Multilateral Alignment

  • Vietnam condemned cross-border terrorism (including Pahalgam attack)
  • Supports India's permanent membership in reformed UN Security Council

Major Challenges

Vietnam's "Four Noes" Policy

Vietnam adheres to strict defense policy:

  • No military alliances
  • No siding with one country against another
  • No foreign military bases
  • No using force in international relations

This limits depth of actual military interoperability.

Economic Asymmetry and Trade Deficit

  • Trade deficit heavily in favor of Vietnam
  • India exports raw materials; imports high-value electronics

Physical Connectivity

  • India-Myanmar-Thailand (IMT) Trilateral Highway faces delays due to:
  • Political instability in Myanmar
  • Funding issues
  • Lack of direct, high-frequency shipping routes

Implementation Lags in Defense Cooperation

  • Several Lines of Credit (LoC) extended (including USD 500 million LoC)
  • Actual drawdown slow due to bureaucratic bottlenecks

Divergent Multilateral Priorities

  • ASEAN divided on Indo-Pacific and QUAD
  • Can dilute bilateral initiatives

Steps to Enhance India-Vietnam Relations

Defence Co-production and Export

  • Expedite BrahMos missile transfer
  • Fully utilize existing Lines of Credit
  • Provide Made-in-India defence platforms (patrol vessels, radars)
  • Help Vietnam reduce dependence on Russian military hardware

Correcting the Trade Deficit

  • Push for removal of non-tariff barriers
  • Fast-track AITIGA review
  • Promote IT, FinTech, and pharmaceutical services

Securing Critical Supply Chains

  • Rapidly execute Rare Earth Elements MoU
  • Build supply chain resilience for clean energy and defense electronics

Scaling Digital Public Infrastructure (DPI)

  • Broaden UPI-NAPAS linkage to create "digital corridor"
  • Facilitate cross-border e-commerce and tourism
  • Template for broader ASEAN digital integration

Related Constitutional/Legal Provisions

  • UNCLOS 1982 (United Nations Convention on the Law of the Sea) — framework for maritime disputes
  • ASEAN-India Trade in Goods Agreement (AITIGA) — regional trade framework

Key Terms and Acronyms

  • Vision SAGAR: Security and Growth for All in the Region
  • IPOI: Indo-Pacific Oceans Initiative
  • AITIGA: ASEAN-India Trade in Goods Agreement
  • MGC: Mekong Ganga Cooperation
  • VINBAX: Vietnam-India Bilateral peacekeeping exercise
  • REE: Rare Earth Elements
  • MRO: Maintenance, Repair, Overhaul
  • CDSCO: Central Drugs Standard Control Organization
  • ICCR: Indian Council for Cultural Relations
  • OVL: ONGC Videsh Limited
  • IMT: India-Myanmar-Thailand
  • NIPL: NPCI International Payments Limited
  • QIPs: Quick Impact Projects
  • CoC: Code of Conduct
  • SCS: South China Sea
  • EEZ: Exclusive Economic Zone