Series of moments defining growing bilateral relations b/w India & Vietnam :-
Five key Geo-Economic issues needs to work upon between India & Vietnam :-
- More than 60 per cent of the international trade today happens in intermediate goods.
- The production networks and value chain activities are geographically spread across a region based on raw material availability, market size and cost advantages.
But statistics reveal that the participation of both India and Vietnam is relatively less than their true potential. The two countries should collaborate with each other in enhancing their GVC participation especially in sectors such as apparel, footwear, electronic goods, and even petrochemicals.
The focus should potentially be on creating SME clusters linked to multinational lead firms. With improved investments and market access, this will help create avenues to address even SME related challenges like adapting to global demand, availability of finance, managing supply-side constraints, innovation, access to technology, reducing carbon emission, among others.
>> Co-operation in Service Sector :-
- India’s global exports of services is $161.8 billion, while Vietnam’s global services exports stands at $12.38 billion as of 2016.
- Vietnam’s economic activities are quite consistent in terms of the participation in the gross domestic product (GDP).
- Agriculture sector makes a 15.9 per cent contribution to Vietnam’s GDP, while industry contributes 32.7 per cent and services sector is also quite upcoming with 41.3 per cent.
- With such a structure, Vietnam has huge potential to develop its services sector especially information and communication technology, financial services, tourism, audio-visual services, logistics, and even higher education in collaboration with India.
However, most of the bilateral trade is only in conventional sectors of our respective comparative advantages like fish and crustaceans, rubber, cotton, edible meat and offal, OEMs, electrical machinery and parts etc. But we need to develop our bilateral trade portfolio based by creating newer competitive advantages in other sectors as well.
>> Need of Continuous Strategic policy attention :-
- The business-to-business (B2B) meetings need to be encouraged and Mode-4 should be further liberalised to contribute to SME growth and create avenues for active GVC participation.
- A key impetus need to be given to public diplomacy as an instrument for “social connect” thereby encouraging people-to-people interactions.
- It is imperative that the two countries maintain a continuity in strategic and defence cooperation to keep leveraging mutual geo-economic benefits.