In a significant move India decided to offer a $100-million credit line to Vietnam to purchase military equipment which will be finalized during the visit of the General Secretary of the Communist Party of Vietnam later this year. Usually, a privilege reserved for its immediate neighbours, this is the first time that New Delhi has extended a credit line for defense purchases to a far off nation. Delhi and Hanoi have been working towards building a robust partnership for the past few years.
It is instructive that India entered the fraught region of the South China Sea via Vietnam. India signed an agreement with Vietnam in October 2011 to expand and promote oil exploration in the South China Sea and then reconfirmed its decision to carry on despite the Chinese challenge to the legality of an Indian presence.
Beijing told New Delhi that its permission was needed for India’s state-owned oil and gas firm to explore for energy in the two Vietnamese blocks in those waters. But Vietnam quickly cited the 1982 United Nations Convention on the Law of the Sea to claim its sovereign rights over the two blocks in question. Hanoi has been publicly sparring with Beijing over the South China Sea for the last few years, so such a response was expected.
What was new, however, was New Delhi’s new-found aggression in taking on China. It immediately decided to support Hanoi’s claims. By accepting the Vietnamese invitation to explore oil and gas in Blocks 127 and 128, India’s state-owned oil company ONGC Videsh Ltd (OVL), not only expressed New Delhi’s desire to deepen its friendship with Vietnam, but ignored China’s warning to stay away.
This display of backbone helped India strengthen its relationship with Vietnam. If China wants to expand its presence in South Asia and the Indian Ocean region, New Delhi’s thinking goes, India can do the same thing in East Asia.
Hanoi is gradually becoming the linchpin of this eastward move by New Delhi. Hanoi fought a brief war with Beijing in 1979 and has grown wary of the Middle Kingdom’s increasing economic and military weight. That’s why in some quarters of New Delhi, Vietnam is already seen as a counterweight in the same way Pakistan has been for China.
That’s not to say good India-Vietnam relations wouldn’t exist otherwise. Vietnamese have traditionally held Indians in high regard because of the latter’s support for Vietnamese independence from France and their opposition to US involvement in the country. And New Delhi formulated a Look-East policy as early as 1991, to capitalize on East Asia’s economic growth. But the rise of China has given this relationship a powerful strategic, not to mention urgent, dimension.
Both sides realize that a stronger bilateral relationship starts with economic ties. The two countries signed an agreement in 2003 in which they envisioned creating an Arc of Advantage and Prosperity in Southeast Asia. So they have been boosting trade, especially after New Delhi signed a free-trade agreement with the Association of South-East Asian Nations in 2009 and concluded talks on Free Trade Agreement (FTA) on services and investment in 2012 which is expected to increase bilateral trade to $200 billion by 2022.
Both sides could still do more to enhance economic cooperation. Bilateral trade is much below the potential, given that India and Vietnam are major emerging economies.
The two countries also need to think creatively about expanding investment opportunities, especially in the energy, steel, and pharmaceutical sectors. This can be done by establishing stronger institutional mechanisms that review the economic relationship on a regular basis and take steps to enhance it.
New Delhi’s abiding interest in Vietnam, though, is in the defence realm. It wants to build relations with states like Vietnam that can act as pressure points against China.
With this in mind, it has been helping Hanoi beef up its naval and air capabilities.
Given that Vietnam and India use similar Russian and erstwhile Soviet defence platforms, New Delhi could easily offer defence technologies to Hanoi. Talks are ongoing for India to sell the BrahMos supersonic cruise missile, an Indo-Russian joint venture. Such arms could allow Vietnam to project regional power and improve deterrence against China.
The two nations also have stakes in ensuring sea-lane security, as well as shared concerns about Chinese access to the Indian Ocean and the South China Sea. Hence, India is helping Vietnam to build capacity for repair and maintenance of its defence platforms. At the same time, the armed forces of the two states have started cooperating in areas like IT and English-language training of Vietnamese Army personnel. The two are also sharing their experiences in mountainous and jungle warfare.
Naval cooperation, however, remains the focus. Here, Vietnam has given India the right to use its port of Nha Trang in the south; the Indian Navy has already made several port calls. It is not entirely clear what the final arrangement would look like, but the symbolism of this is not lost on China.
The two countries potentially share a common friend — the US. New Delhi has steadily built relations with Washington in the past decade, while Vietnam has been courting America as the South China Sea becomes a flashpoint. As these three countries ponder how to manage China’s rise, they will be drawn closer together.
By lashing out against India for its dealings with Vietnam as well as with other states in East and Southeast Asia, China has shown it will try to deter strategic competitors from collaborating against it. But if both India and Vietnam stand firm, they could force Beijing to moderate its expansionist claims on the South China Sea and adopt a more conciliatory stance on other regional matters.
The author teaches at King’s College, London