July 5, 2007EconomyForeign Affairs

To tango with Viet Nam (2)

India must work harder to cultivate allies in East Asia

This is an archived blog post from The Acorn.

Nguyen Tan Dung, Viet Nam’s prime minister, is visiting India, and as Gaurav points out, it’s too much to expect detailed coverage by the press and television channels. Building strong relations with that country is a very important, yet for many reasons, a very difficult aspect of India’s Look East” policy.

In a recent op-ed, Mukul Asher challenged the lazy notion that there is little scope for economic co-operation between India and Viet Nam.

In May 2007, Tata Steel and Vietnam Steel Corp signed an accord for a $3.5 billion steel and iron ore venture to be located in Vietnam. Tata Steel will hold 65% of the 4.5 million metric tonne plant and 30% of the iron ore mine. This is among the largest foreign investment projects in Vietnam, and demonstrates the possibilities for enhancing investment relations. Vietnam’s resource sector, including oil and petrochemicals also hold promise.

It may be useful for the investment promotion agency of Vietnam to consider setting up a physical presence in India and invite India’s apex business organisations to establish a similar presence in Vietnam. There are also opportunities for mutual learning, and information sharing in application of knowledge and technology with a view to narrowing the gap between the actual and best practices in agriculture, healthcare delivery, education, and e-governance practices.

Vietnam’s success in reducing power transmission and distribution losses from 26.2% in 1990 to 10.5% in 2004 could hold lessons for India where transmissions losses are around 25%.

On balance, a more robust partnership has the potential to enhance strategic leverage and lessening of global risks for both countries. Neither can afford to miss the opportunity to inject greater substance to this mutually beneficial bilateral relationship. [DNA]Bharat Karnad has made a compelling argument for India to develop a strategic partnership with Viet Nam—not least by selling it military hardware. And New India sets it a broader geopolitical context.



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