Prime Minister Narendra modi is on his maiden visit to the South Ease Asian country.
India extended a $500 million (nearly Rs 3,326.4 crore) line of credit to Vietnam to deepen their defence cooperation and signed 12 agreements including a deal to construct offshore patrol boats, amid China's muscle flexing in the disputed South China Sea and "emerging regional challenges".
Prime Minister Narendra Modi, who held wide-ranging talks with his Vietnamese counterpart Nguyen Xuan Phuc here, said the two countries have decided to elevate their strategic ties to a Comprehensive Strategic Partnership to provide it a new momentum.
"Our decision to upgrade our Strategic Partnership to a Comprehensive Strategic Partnership captures the intent and path of our future cooperation. It will provide a new direction, momentum and substance to our bilateral cooperation," said Modi, who arrived in the country on Saturday, on his maiden visit to this key south east Asian nation.
Vietnam had earlier Comprehensive Strategic Partnership only with Russia and China.
"I am also happy to announce a new Defence Line of Credit for Vietnam of $500 million for facilitating deeper defence cooperation," Modi said after the signing of the agreements.
The 12 agreements were signed in a wide range of areas covering defence, IT, space, cyber security and sharing white shipping information in presence of Modi and Phuc.
"The range of agreements signed just a while ago point to the diversity and depth of our cooperation," he said, adding the agreement on construction of offshore patrol boats is one of the steps to give concrete shape to the bilateral defence engagement.
Later in a joint statement, both India and Vietnam also called for "peaceful" resolution of the South China Sea issue and "exercise self-restraint". They also urged all parties to show "utmost respect" for the United Nations Convention on the Law of the Sea (UNCLOS).
Both sides called on "all states to resolve disputes through peaceful means without threat or use of force and exercise self-restraint in the conduct of activities that could complicate or escalate disputes affecting peace and stability, respect the diplomatic and legal processes, fully observe the Declaration on the conduct of parties in the South China Sea (DOC) and soon finalise the Code of Conduct," the joint statement said.
"They also recognised that the sea lanes of communication passing through the South China Sea are critical for peace, stability, prosperity and development. Vietnam and India, as State Parties to the UNCLOS, urged all parties to show utmost respect for the UNCLOS, which establishes the international legal order of the seas and oceans," it said.
China is involved in a raging dispute with the Philippines, Vietnam, Taiwan, Malaysia and Brunei over ownership of territory in the South China Sea (SCS), a busy waterway through which India's 50% trade passes
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 "Prime Minister Narendra Modi with Vietnamese President Tran Dai Quang")
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