Vietnam Free Trade Agreements with India
Vietnam and India have a long-standing trade relationship that has grown significantly over the years. In 2020, Vietnam and India recorded a bilateral trade turnover of approximately $10.3 billion, up from $1 billion in 2006.
One of the key drivers of this growth is the free trade agreements (FTAs) that have been signed between the two countries. In this article, we will take a closer look at the Vietnam free trade agreements with India and how they have impacted trade between the two nations.
The India-ASEAN FTA
The India-ASEAN Free Trade Agreement (FTA) was signed in August 2009 between India and the Association of Southeast Asian Nations (ASEAN), which includes Vietnam. The agreement aimed to reduce tariffs between India and ASEAN countries, which would boost trade and investment between the two regions. As a member of ASEAN, Vietnam was able to benefit from the agreement.
Under the India-ASEAN FTA, over 90% of trade between India and ASEAN countries is duty-free. This has resulted in increased trade between the two regions and has helped to strengthen the economic relationship between India and Vietnam.
The India-Vietnam FTA
In addition to the India-ASEAN FTA, India and Vietnam have also signed a bilateral FTA. The India-Vietnam FTA was signed in 2008 and came into effect in 2010. The FTA aimed to reduce tariffs on goods traded between the two countries and increase investment flows.
Under the India-Vietnam FTA, over 4,000 tariff lines were eliminated, leading to increased trade between the two countries. The FTA also includes provisions for the protection of intellectual property and the establishment of a dispute resolution mechanism.
Impact of the FTAs on Trade
The India-ASEAN FTA and India-Vietnam FTA have had a significant impact on trade between India and Vietnam. In 2020, India`s exports to Vietnam were valued at $5.71 billion, an increase of 12.34% compared to the previous year. Vietnam`s exports to India were valued at $4.58 billion, an increase of 11.61% compared to the previous year.
The FTAs have also led to increased foreign direct investment (FDI) between India and Vietnam. In 2020, India was the 26th largest investor in Vietnam, with total FDI of $1.67 billion. Indian companies have invested in sectors such as energy, infrastructure, and telecommunications in Vietnam.
Conclusion
The Vietnam free trade agreements with India, particularly the India-ASEAN FTA and India-Vietnam FTA, have played a crucial role in boosting trade between the two nations. The agreements have led to the elimination of tariffs on a wide range of goods, increased investment flows, and strengthened the economic relationship between the two countries. As a professional, it is important to understand the impact of these agreements on the economy and keep abreast of any updates or developments in this area.