Indian and Vietnamese officials agreed at a meeting in Ho Chi Minh City Friday that the trade relationship between the two countries had yet to meet its economic potential.
Addressing the event at Majestic Hotel, the Indian Ambassador to Vietnam Lal T. Muana said, "India and ASEAN nations, with the active support and encouragement of business communities, are embarking on ambitious programs of economic integration."
He mentioned a Free Trade Agreement in goods reached in Bangkok last year and said that the parties were now negotiating for free trade in services.
Ly Quoc Hung, general director of the South West Asia and Africa Department of Vietnam's Ministry of Industry and Trade, said that Vietnam and India established diplomatic relations in 1954 and upgraded the relations to the Ambassadorial level on January 7, 1972.
He said the two countries have signed various agreements over the last 40 years.
"Trade between the two counties increases each year," Hung said. "From 2003 to 2008, imports and exports grew 5-fold, from US$490 million to $2.48 billion."
Bbecause of the international financial crisis, Vietnam-India bilateral trade reached only $2.05 billion in 2009, but it has already begun to recover this year, Hung said.
But he said economic ties between the two countries were not strong enough.
Pham Cong Dung, head of the trade division under the Ministry of Agriculture and Rural Development's Department of Agro-Processing and Trade, said, "Big investors in our agro-forestry-fishery area are mainly from Taiwan, Japan, Korea Republic and Thailand."
Speaking to Thanh Nien Weekly during a break, Dung said that 2.5 billion a year in trade was a small amount.
Indian Ambassador Lal T. Muana told Thanh Nien Weekly that the mutual cooperation between the two countries was only basic.
Some Indian businesspeople asked questions about taxes and business activities, but Hung and Dung said the issues could only be made clear and solved by the General Taxation Department and the Ministry of Planning and Investment.
However, the two Vietnamese representatives said they would take notes and report the concerns to the relevant agencies.
A. Mohan Kumar, chairman of the Indian Business Chamber in Vietnam (InCham), said six Indian businesses have planned to or are in the process of setting up their offices in Vietnam, including Tata Steel Ltd., which has signed an MoU with Vietnam Steel Corporation to build a 4.5-million-ton mill valued at $3.5 billion, and Bank of India, which is in the process of setting up a branch in Ho Chi Minh City.
Indian Prime Minister Dr. Manmohan Singh is scheduled to make his first visit to Vietnam in October, 2010."