India and Vietnam Upgrade Bilateral Relations to Enhanced Comprehensive Strategic Partnership with $25 Billion Trade Target

India and Vietnam Forge Enhanced Comprehensive Strategic Partnership

India and Vietnam have elevated their ties to an enhanced comprehensive strategic partnership, setting a $25 billion annual trade target by 2030. The move comes as Prime Minister Narendra Modi and Vietnamese President To Lam held talks focusing on expanding bilateral ties in areas of trade, defence, and critical minerals amidst increasing geopolitical upheavals.

The two sides signed 13 agreements covering digital payments, rare earth minerals, pharmaceuticals, education, banking, and culture, providing for deeper two-way engagements in these areas. Modi and Lam also deliberated on the situation in the Indo-Pacific amid China's increasing assertiveness in the region, and agreed to continue to contribute to the rule-of-law, peace, stability, and prosperity.

Trade and Economic Engagement

Read also: Treasury Yields Experience Largest Increase in Two Weeks Following Release of Labor Market Data

Notably, the bilateral trade between India and Vietnam has doubled in the last decade to reach $16 billion. The target now is to increase it to $25 billion by 2030. To emphasize the economic engagement, Modi cited a plethora of agreements signed between the two countries, including a MoU between drug authorities to increase access to Indian medicines in Vietnam, and easier exports of Indian agricultural, fisheries, and animal products to Vietnam.

The two sides also agreed to update the India-ASEAN trade agreement by the end of this year, providing a new impetus to trade and investment between India and all ASEAN countries.

Financial Connectivity and Cooperation

Read also: US-Iran Tensions Spark Uptick in Oil Prices Amid Global Market Decline

To boost financial connectivity, Modi and Lam decided to enhance cooperation between their central banks. India's UPI and Vietnam's fast payment systems will soon be linked, and state-to-state and city-to-city cooperation between the two countries will be strengthened.

Defence and Security Cooperation

Modi and Lam agreed to deepen political trust and elevate security cooperation. Last year, the two sides inked a pact to set up a framework for submarine search, rescue, and support mechanism, and signed a letter of intent (LoI) to strengthen bilateral defence industry collaboration.

In his remarks, Lam noted that Vietnam's relations with India have made rapid and comprehensive progress since becoming India's first comprehensive strategic partner in ASEAN a decade ago. Modi said that the enhanced strategic partnership will support each other's rapid growth, and that India will broaden its relations with ASEAN with Vietnam's cooperation.

The visit marks Lam's first state visit to India, which began on Tuesday and will continue for the next three days.