Vietnam and India expand trade and investment

In recent times, both countries have elevated their fine traditional relations and are now considered lucrative markets of each other with diverse demands. Vietnam has achieved an impressive growth of exports to India. Over the past few years, the country’s exports to the Indian market have seen a year-on-year improvement of 46.22% to VND320 million on average.

Previously, Vietnam mainly exported raw products to India. Its major exports to the market have diversified after the ASEAN-India Free Trade Agreement was signed.

According to statistics, Vietnam’s Indian exports after the first 11 months of 2013 were estimated at US$2.19 billion, up 34.6% from 2012’s figure and farm commodities were the second largest export to India.

India’s spice exports of more than 500,000 tonnes earn over US$1.7 billion per year. However, the focus on spice exports creates a need by India to import Vietnam’s agricultural products such as coffee, cashew nuts and pepper for processing.

Vietnam fetched US$9.74 million from exporting coffee in 2008, and US$57.5 million in 2012, a six-fold increase. Vietnam is the largest Robusta coffee exporter to India.

Despite ranking third among global coffee producers, India has imported coffee from overseas to produce instant coffee for re-exports.

From 2008 to 2012, pepper was the commodity with the highest turnover in 2011, up 4.5 times and doubling 2010’s figure.

The Vietnam Association of Seafood Exporters and Producers (VASEP) said seafood was the smallest export among Vietnam’s agro-fisheries group.

Since 2010, Vietnam began exporting this type of product to India. The country’s seafood export turnover to India reached nearly US$15 million in 2012, up 23% over 2011’s figure. However, its seafood turnover to India showed a downtrend in 2013 with more than US$10 million in the first ten months of the year, down 16% from last year’s period.

According to statistics from Vietnam Customs, Vietnamese tra fish was the only product exported to the Indian market in the first ten months of 2013.

The seafood sector’s exports encounter difficulties in this big market because India is also the major seafood exporter in the world.

Vietnam has also boosted imports of some aquatic products from India. Through the reviewed period, Vietnam’s total seafood import turnover from India hit more than US$12.2 million, up 116% against the same period in 2012.

Vietnam was India’s third largest shrimp exporter in the first six months of 2013. With an abundant supply of white-leg shrimp, India has become the main provider of raw shrimp to some nations like China.

Vietnam is suffering shortages of materials for food processing due to epidemics. Vietnam‘s eighth place in Indian shrimp imports in 2012 jumped to third position in 2013 just after the US and Japan.

India’s shrimp export value has also increased from US$20.8 million in the six months of 2012 to US$55.4 million in 2013. In addition, India imported a large volume of tra fish from Vietnam for consumption at local seafood stores. Many restaurants in large subways in Mumbai and Delhi and some supermarkets in major cities in Dina also sell tra fish.

India is one of the most populous nations in the world, therefore, its demand for goods are diverse.

Vietnam boasts great potential for export commodities to the market including cashew nuts, spices, green tea, canned food and natural rubber.

Additionally, handicrafts, construction materials and sanitary equipment, ready-made clothes are also Vietnam’s export advantages in the international market.