India-Vietnam Relations – Explained Pointwise

The Vietnamese President is on an official visit to India, during which the two sides elevated their bilateral relations to the level of an “Elevated Comprehensive Partnership” and signed 13 agreements, including one on critical minerals. Both countries also decided to set a new bilateral trade target of $25 billion by 2030 and enhance defence procurement cooperation between them.
Vietnam is a major pillar of India’s ‘Act East Policy‘ and ‘Vision MAHASAGAR‘. India also seeks to expand its ties with ASEAN through its relations with Vietnam. Moreover, both the countries have a common outlook in the field of Indo-Pacific.

Table of Content

Evolution of India-Vietnam relations What is the significance of India-Vietnam relationship? What are the challenges in India-Vietnam relationship? What are the various initiatives undertaken to boost the India-Vietnam relationship? What should be the way forward?

Evolution of India-Vietnam relations:

Anti-Colonial Roots	The bond was forged between Mahatma Gandhi and Ho Chi Minh, who shared a mutual struggle against colonial rule. India was a crucial supporter of Vietnam during its war for independence from France. It served as the Chair of the International Commission for Supervision and Control (ICSC) formed by the 1954 Geneva Accord.
1970s	Full diplomatic relations were established in 1972. India remained one of the few countries to support Vietnam during its 1979 conflict with China and its subsequent international isolation. India was also one of the few non-communist countries to condemn the U.S. action during the Vietnam War.
1990s	Look East Policy (1992): Following India’s economic liberalization, Vietnam became a focal point of India’s “Look East Policy,” shifting the relationship from purely ideological to economic and strategic.
2000s-Now	2007: Establishment of a Strategic Partnership, expanding cooperation into defense and security. 2016: Elevation to Comprehensive Strategic Partnership (CSP) during PM Modi’s visit to Hanoi—a status Vietnam shares with only a few countries like Russia, China, and the US. 2026: The relationship has reached a new peak with the elevation to an Enhanced Comprehensive Strategic Partnership.

What is the significance of India-Vietnam relationship?

1. Strategic & Security Significance:
   • Vietnam is the most critical pillar of India’s “Act East Policy.” A strong relationship with Vietnam allows India to maintain a strategic presence in the South China Sea, ensuring that the Indo-Pacific remains free and open.
   • India is viewed as a “trusted friend” and a reliable source of defense modernization. By collaborating with India on BrahMos missiles and maritime surveillance, Vietnam diversifies its security dependencies and strengthens its “Four No’s” defense policy (no part in military alliances, no siding with one country against another, no foreign bases on its territory, and no use of force in international relations). This allows Vietnam to balance its complex relationship with China without becoming dependent on any single patron.
2. Economic Significance:
   • Supply Chain Resilience: In 2026, both nations signed a landmark MoU on Rare Earths and Critical Minerals. This is a direct move to reduce reliance on Chinese monopolies and secure the raw materials needed for high-tech industries like EVs and semiconductors.
   • Trade Complementarity: Vietnam imports Indian raw materials (iron, steel, cotton) and pharmaceuticals to fuel its manufacturing boom. India imports electronics, mobile components, and chemicals from Vietnam to support its digital infrastructure. 
   • Digital Connectivity: The linking of India’s UPI with Vietnam’s payment systems in 2026 has revolutionized trade for small businesses and tourists alike.
3. Voice of the Global South: As two of the world’s fastest-growing economies in 2026, they use their partnership to champion the interests of developing nations at the UN and ASEAN.
4. Gateway to ASEAN: Vietnam is one of ASEAN’s most dynamic and influential members. A strong partnership with Vietnam serves as a key bridge for India to deepen its economic, strategic, and cultural engagement with the entire 10-nation bloc. Conversely, India provides Vietnam with a massive consumer market and a strategic partner in the Indian Ocean Region (IOR).
5. Defense and Security Cooperation: Defence & security cooperation is a key pillar in India-Vietnam Comprehensive Strategic partnership. Vietnam is India’s most trusted defense partner in Southeast Asia. This cooperation helps India gain valuable operational experience in the region, test its military hardware, and build the capacity of a like-minded nation.
6. Civilizational Ties: The shared Buddhist heritage provides a layer of “soft power” that ensures public support for political and military alliances.

What are the challenges in India-Vietnam relationship?

1. Untapped Trade Potential: Bilateral trade remains well below its potential. The target of $15 billion has been repeatedly pushed back. Moreover, India faces a trade deficit with Vietnam, with Vietnamese exports (electronics, machinery) outpacing Indian exports.
2. Tariff & Non-Tariff Barriers: The ASEAN-India Trade in Goods Agreement (AITIGA) has uneven tariff coverage, with many products still in sensitive categories. Beyond tariffs, non-tariff barriers – including differences in technical standards, complex certification procedures, and regulatory frictions – significantly raise transaction costs.
3. Logistical Inefficiencies: Limited direct shipping links and weak maritime connectivity result in high logistics costs, making bilateral trade less competitive compared to trade with nations having better infrastructure.
4. Lack of Direct Links: The two countries are separated by the Bay of Bengal and lack direct land or efficient sea routes. While a Trilateral Highway connecting India, Myanmar, and Thailand is under development, its proposed eastward extension to Vietnam remains in the planning phase with no direct projects currently implemented.
5. Economic Dependency: Despite strategic friction, China remains Vietnam’s largest trading partner and a major source of FDI. Vietnam must balance its security ties with India against the risk of economic retaliation from Beijing.
6. Vietnam’s Balancing Act: Vietnam’s foreign policy is built on “diversification” and avoiding over-dependence on any single power. While it has a Comprehensive Strategic Partnership with India, it has also recently upgraded its relationship with China to a “Community with a Shared Future.”
7. Defense and Arms Supply Challenges: While India has supplied defense equipment, competition from Russia, Israel, and the US limits India’s defense market share in Vietnam. India’s own defense industrial capacity and export infrastructure are still maturing.
8. Limited People-to-People and Cultural Exchange: Despite ancient civilizational links (Cham culture, Buddhism), contemporary awareness of each other in both societies is limited. The Indian diaspora in Vietnam is small, reducing the people-to-people bridge compared to India’s ties with, say, Singapore or the US.

What are the various initiatives undertaken to boost the India-Vietnam relationship?

Political Cooperation	Elevated Partnership (2026): The relationship was formalized as an “Enhanced Comprehensive Strategic Partnership,” marking a significant upgrade from the 2016 Comprehensive Strategic Partnership. 2+2 Ministerial Dialogue: India and Vietnam have established a Strategic Diplomacy-Defense Dialogue (2+2) involving their Foreign and Defense Ministers. This elite diplomatic format is shared by India with only a handful of partners like the US and Japan.
Economic & Trade Cooperation	Trade Target: The bilateral trade target has been raised to $25 billion by 2030. UPI-VietQR Interoperability: In a landmark move for 2026, India’s NIPL and Vietnam’s NAPAS signed an agreement to link their payment systems. This allows for seamless cross-border QR code payments, benefiting tourists and small businesses. IT and Software Services: An MoU between the Ministry of Electronics & IT (India) and the Ministry of Science and Technology (Vietnam) focuses on deep-tech collaboration, specifically in AI, cybersecurity, and semiconductor supply chains. Rare Earths Partnership: MoU was signed between India and Vietnam’s ITRRE for the joint exploration and processing of rare earth elements. Vietnam holds the world’s second-largest reserves, and this partnership is designed to build a non-China-dependent supply chain.
Defense and Strategic Security Cooperation	Shared Vision 2030: Defence cooperation is guided by the “Joint Vision Statement on India-Viet Nam Defence Partnership towards 2030,” focusing on capacity building, joint exercises, and industry collaboration. BrahMos Missile Deal: Negotiations for the sale of the BrahMos supersonic cruise missile (valued at approximately $629 million) have entered their final stages, signaling a shift from capacity building to active deterrence cooperation. Naval Support: India is moving forward with a $500 million defense credit line, which includes the construction of 14 high-speed patrol boats and potential upgrades for Vietnamese Navy ships and submarines. Indo-Pacific Oceans Initiative (IPOI): Vietnam officially joined the IPOI in 2026, aligning with India’s vision for maritime security and disaster management in the region.
Cultural Cooperation	Preserving Heritage: India is funding the digitization and preservation of ancient Cham manuscripts (of Indian origin) found in Vietnam, reinforcing the historical civilizational link. Academic Chairs: New India Studies Chairs have been established at the University of Da Nang and in Ho Chi Minh City by the ICCR. Nalanda University Link: An agreement between Nalanda University and Vietnam’s Ho Chi Minh National Academy of Politics has been launched to train Vietnamese officials and researchers in public policy and governance.

What should be the way forward?

1. Institutionalizing the Relationship:
   • Hold annual summit-level meetings (not just on sidelines of multilateral forums) to sustain political momentum.
   • Establish a Joint Strategic Vision Committee at the foreign minister level with quarterly reviews.
   • Create a Track 1.5 / Track 2 dialogue mechanism involving think tanks, retired diplomats, and business leaders from both sides to generate fresh ideas.
2. Boost Economic Ties, Trade and Investment:
   • Set realistic, time-bound trade targets (e.g., $20 billion by 2028) with sector-specific roadmaps.
   • Reduce the trade deficit by promoting Indian pharmaceuticals, IT services, machinery, and agricultural products in Vietnam.
   • Encourage Indian companies — especially in electronics, textiles, and manufacturing — to set up supply chain operations in Vietnam as part of China+1 diversification strategies.
   • Establish a Fast Track Investment Mechanism for Indian businesses similar to what Japan and South Korea enjoy in Vietnam.
3. Deepening Defense and Security Cooperation:
   • Expedite BrahMos missile transfer — finalizing and delivering the BrahMos missile system to Vietnam would be a landmark signal of strategic trust and India’s emergence as a credible defense exporter.
   • Expand joint naval exercises in the South China Sea to enhance interoperability and signal shared commitment to freedom of navigation.
   • Offer Made-in-India defense platforms — patrol vessels, radars, and ammunition — under favorable financing to reduce Vietnam’s dependence on Russia (especially post-Ukraine war disruptions to Russian arms supplies).
   • Establish a bilateral defense industry working group to co-develop or co-produce equipment suited to Vietnam’s operational needs.
4. Enhancing Physical and Digital Connectivity:
   • Push for direct shipping lines between Indian ports (Chennai, Vishakhapatnam) and Vietnamese ports (Ho Chi Minh City, Da Nang).
   • Increase direct flight connectivity between major Indian and Vietnamese cities to boost tourism and business travel.
   • Collaborate on digital public infrastructure — India can export its UPI, Aadhaar-equivalent, and digital governance frameworks to Vietnam, which is rapidly digitizing.
   • Explore a India-Vietnam digital corridor for fintech, e-commerce, and startup ecosystems.
5. Strengthening Multilateral Alignment:
   • Coordinate positions at ASEAN, East Asia Summit, UNCLOS tribunals, and the UN more systematically.
   • India should reconsider or find alternative pathways to RCEP participation, or negotiate bilateral trade enhancements that compensate for its absence.
   • Work together on reformed multilateralism — UNSC reform, WTO modernization, and climate finance — where both have convergent interests.
6. Expanding People-to-People and Cultural Ties:
   • Significantly increase scholarships for Vietnamese students at Indian universities, especially in STEM, medicine, and business.
   • Promote Buddhist cultural diplomacy, joint restoration projects, pilgrimages, and cultural festivals can build lasting bonds.
   • Establish Indian Cultural Centers in Hanoi and Ho Chi Minh City and Vietnamese cultural centers in Delhi and Mumbai.
   • Support Yoga, Ayurveda, and Indian soft power more actively in Vietnam, where there is growing interest.

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