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Injecting New Dynamism to India-Vietnam Ties

In its extended neighborhood foreign policy, Indian foreign minister Sushma Swaraj paid a three-day visit to Vietnam beginning 25 August 2014. Vietnam is one of India’s many strategic partners and in recent years bilateral ties have been strengthened in strategic and economic domains and many high-level visits only reinforced this convergence of interests between the two countries. The purpose of this essay is to assess the fruits of Swaraj’s visit and what does it mean to the bilateral ties now and beyond.

Swaraj’s visit is a demonstration of India’s resolve to deepen and implement its Look East Policy. After coming to power, the foreign minister has already visited Singapore and Myanmar in August. With Vietnam, India agreed to deepen cooperation in defence and oil sectors, among others. From its side, Vietnam has expressed a strong desire for greater Indian involvement and investment with a view to balance China.

Vietnam has a bilateral issue over sovereignty claims in South China Sea with China, which is developing into a serious one with the possibility of a conflict breaking out. Vietnam needs friends not only as India but other friendly countries such as Japan, the Philippines and some other members of the South East Asian nations. Lately, India-Vietnam defence and economic relations are deepening. There are nearly a dozen countries in the region which have contending claims over parts or the whole of the South China Sea and the differences over this are providing the seeds for a potential conflict. Though India is not a party to this dispute, India has economic stakes in the area of the South China Sea that Vietnam claims as its own. India is there on Vietnam’s invitation and stands committed on the international law of the seas.

Earlier Vietnam offered five oil and gas blocks to OVL, the overseas arm of Oil and Natural Gas Corporation, to explore if there is any prospect of striking oil in the area it claims its own in South China Sea, despite Chinese protests. The Indian entity, the OVL, had concluded that there was little commercial value in oil blocks 128 and gave up in 2012 but Vietnam persuaded India to stay on to explore further. That lease expired in 2014 and was renewed. During his visit to India in November 2013, the Secretary General of the Vietnamese Communist Party Nguyen Phu Throng had extended this offer to India. Though India does not see much of commercial value to remain there, India still decided to stay there because India believes it has strategic interests in the South China Sea. There is also a view that these oil wells could be extremely productive and therefore India was inclined to take up exploration, though no agreement has been signed yet. At present, India is “looking at the feasibility”. In principle, India maintains the importance of free lanes of navigation and access to resources. This also gives an opportunity to India to expand its maritime presence beyond the Indian Ocean region and the presence of Indian naval vessels enables the Indian Navy to check China’s expansionist maritime ambition much to the satisfaction of the Vietnamese. It is for this reason Vietnam has received whenever Indian naval vessels have embarked on goodwill visits.

It seems because of strategic considerations, Vietnam renewed India’s lease of two oil blocks for another year on the eve of Swaraj’s visit. From India’s perspective, it reaffirms its position as a continuing commercial stakeholder in a region where territorial disputes have flared up between Vietnam and the Philippines with China. It is interesting that after visiting Hanoi, Swaraj visited China for a bilateral meeting with her counterpart Wang Yi and for preparing for Chinese President Xi Jinping’s visit to India in mid-September. Her Hanoi visit was also a part of the preparation of President Pranab Mukherjee’s visit to Vietnam in mid-September. Again, while Prime Minister Narendra Modi traveled to Tokyo on 30 August for a summit meeting with Abe Shinzo, he would host Australian Prime Minister Tony Abbott after he returned from Tokyo when a civil nuclear cooperation agreement is expected to be signed. Then Modi travels to Washington for a summit meeting with President Barack Obama and goes to Beijing in November for the Asia Pacific Economic Cooperation meeting.

What do all these meetings mean in terms of maintenance of balance of power in the changing international context? There is no doubt that the distribution of global powers has undergone perceptible change. While those who wielded considerable powers are on the decline, there are new claimants who have accumulated economic wealth from where they aspire to add political power too in global affairs. Against this change, the frequent travel by heads of states can be seen as seeking consensus how to adjust their respective countries’ positioning to this new global situation.

In the Asia-Pacific context, China has already accumulated considerable economic power and emerged as the second largest economic power in the world eclipsing Japan in 2010 to the third position and now keen to add political muscle backed by its military strength. It has begun to challenge the US and trying to intrude into the US political space. Such Chinese policy is causing disquiet in areas where other nations’ interests are at stake. Since the US is bound by treaty obligations to defend the interests of its allies as well as maintain international order, there is a new situation where interests of the US and China could come under conflict. To manage this new situation is a new challenge that global leaders confront currently and the flurry of international visits by leaders may be seen in that light.

In May 2014, Chinese actions in the South China Sea infuriated the Vietnamese when in demonstration of its assertiveness China sent its mobile oil rig Haiyang Shiyou 981 to Vietnamese waters for alleged oil exploration, despite Hanoi’s protests. After preliminary surveys, Chinese withdrew on 15 July, a month earlier than expected, but it sent the message stamping its hegemonic presence there, asserting its rights to move at will in clear violation of international law. In further assertion of its rights, China also announced to build lighthouses on five islands in South China Sea, of which two islands are in waters claimed by Vietnam. This was in reaction to a possible move by ASEAN countries to freeze all activity but China wants to build whatever and whenever on the East Sea. China claims almost 90 per cent of the South China Sea.

In its typical “cabbage strategy”, China is making a series of small transgressions, adding layer by layer to its claims each individually not big enough to spark a conflict and by doing so, it is attempting to change the status quo in its favour. China has similar disputes with the Philippines and dispatched a minor flotilla of fishing vessels to assert its claims. Seen in this background, Swaraj’s visit was a move in right direction in India’s engagement strategy in the Asia-Pacific region to build consensus so that peace and order is maintained in the region. The Chinese strategy in South China Sea is similar to its strategy in Depsang and Demchok area in Ladakh.

Vietnam is having more friends now than before. Besides India, Vietnam has built close ties with Japan as well. Japan has agreed to provide Vietnam with six used naval boats to boost its patrol and surveillance capacity in the East Sea. The previous UPA government had agreed to deliver 6 Coast Guard ships for defense of Vietnam’s EEZ against Chinese continuing violations and needs now to be executed. Vietnam is also keen to acquire Brahmos missile from India. India need not hesitate to sign an agreement towards this and make Vietnam the first global recipient of Brahmos missiles. On the issue of maritime dispute, India stands for peaceful resolution in accordance with international law, including the United Nations Convention on the Law of the Sea of 1982. Recently, India set an example for the resolution of maritime dispute through international arbitration by accepting the decision of an international tribunal in a maritime dispute between it and Bangladesh. The UN tribunal ruled in favour of Bangladesh at that time and therefore India wants China to follow such example accordingly in addressing the South China Sea issue.

In view of the Chinese assertiveness, India has a role in bolstering Vietnam’s military capacity building to impose minimum military deterrence against potential aggressor. Previously, India offered Vietnam a $100 million line of credit for the purchase of four offshore patrol vessels. When President Pranab Mukherjee visits Vietnam in mid-September, days before the Chinese President Xi Jinping visit India, he is expected to officially extend this credit line and some more agreements in the field of defence are expected to be signed between the two countries. Vietnam has a much longer wish list, however. It wants surveillance equipment, unmanned aerial vehicles, tanks, ships and of course the Brahmos missiles. Though the $100 million credit is small, it sends a big message to China which is expected to be upset over it as it considers Southeast Asia to be its area of influence.

Prime Minister Nguyen Tan Dung is also expected to pay a visit to India in October 2014. With this, all three top leaders of Vietnam would have visited India in the past 12 months, indicating the kind of importance Vietnam attaches to its ties with India. Indo-Vietnamese ties are going to move beyond mere political relations towards a comprehensive security/economic partnership in the coming years. There are potentials to increase bilateral trade from the present $8 billion to $12 billion by 2016 and to $20 billion by 2020. Vietnam is ideally positioned to be the economic gateway for India’s engagement strategy with the ASEAN. India can also train Vietnamese naval staff for the next 3 kilo Class submarines. Together with Japan, India can initiate similar steps to include Australia, Indonesia and the Philippines and tighten the noose knot around China’s neck, thereby frustrate China’s expansionist designs.

In the field of tourism, both the countries would look at their Buddhist circuit. Direct flights between India and Vietnam are also set to take off from November 2014 with Jet Airways and Vietnam Airlines to fly directly from New Delhi and Mumbai to Hanoi with a stopover at Bangkok. Cooperation in the field of education and cyber crime are other areas being explored. Both have an extradition treaty by which prisoners and sentenced people can be transferred.

Vietnam has a lot of expectations from India as it looks India as a reliable friend. If the Modi government can inject some substantive military muscles to India’s Look East Policy by deepening defence and military cooperation with friendly countries of Asia, it will contribute to the maintenance of Asian security and stability. Of all its partners in Asia, Japan and Vietnam are the special two countries with which India needs to pay special attention. The India-Japan-Vietnam trilateral dialogue that this author proposed in one of the earlier writings seems more relevant now than before. Even Philippines and Australia can be taken on board as other regional stakeholders at a later stage. Together, these five countries could form a front, if not to check the Chinese aggressive advance in the region, at least to send a strong message to China that its policies and actions are unacceptable and that if it truly aspires to be a big power, it should learn to behave as a responsible one acceptable to others.

(The writer Dr. Rajaram Panda is The Japan Foundation Fellow at Reitaku University, Chiba, JAPAN. E-mail:

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