Prime Minister Nguyen Xuan Phuc met Indian President Ram Nath Kovind in New Delhi on January 24, as part of his visit to attend the ASEAN – India Summit in India (Photo: VNA)

New Delhi (VNA) - Intensity and momentum of Vietnam-India bilateral engagement have created win-win situation for both countries, according to Dr. Faisal Ahmed, Associate Professor and Chairman of International Business Area at FORE School of Management, New Delhi.

In a recent interview granted to the Vietnam News Agency, the scholar noted that looking closely at the intensity of India-Vietnam engagements in the near past, it can be said that it truly exemplifies a pro-active approach in managing bilateral relations.

He said after the two countries agreed to upgrade their level of engagement from strategic partners to a “comprehensive strategic partnership” in 2016, India’s exports to Vietnam in 2016-17 increased by 28.87 percent over the previous year. And interestingly, Vietnam’s exports to India also increased by 29.69 percent, while the bilateral trade stood at 10.11 billion USD, which was again a 29.14 percent increase from the previous year, Dr. Faisal Ahmed said, stressing that all those statistics clearly revealed that intensity and momentum of the bilateral engagement had created win-win situation for both countries.

Recalling that last year, President Pranab Mukherjee called upon the two countries to work toward a 15 billion USD target for bilateral trade by 2020, Dr. Faisal Ahmed believed the target was quite achievable given the intensity and level of cooperation. According to him, with the momentum set forth by Prime Minister Narendra Modi, the two countries could even expect to achieve a higher target for trade and an increase in bilateral investments.

Faisal Ahmed really appreciated the way the bilateral institutional frameworks had helped in enhancing economic cooperation. He said the role of industry chambers, the role of regional congregations like Mekong-Ganga Cooperation (MGC) and also the role of India-ASEAN FTAs in goods as well as in services have immensely contributed to the development of bilateral cooperation. Policy frameworks like the “Look East Policy” and now its successor “Act East Policy” too were being leveraged well by the government to boost India-Vietnam bilateral ties, he said.

Mentioning the potentialities the two countries have not yet tapped, Dr. Faisal Ahmed suggested that Vietnam and India need to focus on three crucial aspects, the first of which is Global Value Chain (GVC). According to him, the participation of both India and Vietnam has relatively been less than their true potential. He thought the two countries could collaborate with each other in developing GVC especially in sectors such as apparel, footwear, electronic goods, and even petrochemicals.

The second important aspect is the development of SMEs, the scholar said, calling on the two countries to develop formal institutional frameworks that could guide SME’s role and participation in the GVCs. The focus could be on creating SME clusters linked to leading firms. This would help in creating avenues to address SME-related challenges like adapting to global demand, availability of finance, managing supply-side constraints, innovation, access to technology, reducing carbon emission, among others.

And thirdly it is the Services Sector. Faisal Ahmed noted that India’s global exports of services were 161.8 billion USD while Vietnam’s global services exports stood at 12.38 billion USD in 2016. Vietnam’s economic activities were quite consistent in terms of the participation in GDP. Agriculture sector made a 15.9 percent contribution to Vietnam’s GDP, while industry contributes 32.7 percent and service sector 41.3 percent. He believed that with such a structure, Vietnam has huge potential to develop its services sector, especially information and communication technology, financial services, tourism, logistics, and even higher education in collaboration with India.

Accordingly, Dr. Faisal Ahmed specifically names three mechanisms that could potentially increase economic cooperation between the two countries, which are B2B meetings and further liberalization of Mode-4 to enhance participation in global value chains; public diplomacy as an instrument for “social connect” to encourage people-to-people interactions; and maintaining a continuity in strategic and defence cooperation to keep leveraging mutual benefits.

Dr. Faisal Ahmed held the position of consultant to the United Nations Economic and Social Commission for Western Asia (UNESCWA) and other organisations, and has led project supported by the Ministry of Commerce & Industry of India. His articles have appeared in leading newspapers like The Financial Express, The Hindu Business Line, and The Economic Times. The scholar has also been on expert panel in national and international media on trade and geopolitical issues.-VNA