Press Information Bureau

Government of India

Ministry of Finance

04-May-2011 17:11 IST

The Finance Minister Shri Pranab Mukherjee had a bilateral meeting with the Prime Minister of Vietnam, Mr. Nguyen Tan Dung in Hanoi, Vietnam, today. During the meeting, Shri Mukherjee said that the Strategic Partnership established between the two countries is based on implicit mutual trust, a convergence of interests including in the field of defence and security and similar approaches on global and regional issues. As two dynamic and fast growing economies of Asia, our effort is to add greater content, through concrete programmes and projects, to our Strategic Partnership, he said.

Mentioning that defence cooperation between the two countries is robust and growing satisfactorily, he said that India will continue to assist Vietnam in the modernization of its armed forces, particularly the Navy and Air Force. India is also prepared to strengthen intelligence cooperation with Vietnam, he added.

Shri Mukherjee said that he is not satisfied with the level of economic cooperation between the two countries which, though growing, is far below potential. The bilateral trade is not even 5% of India’s overall trade with ASEAN. Saying that this year we have already achieved US$ 1 billion trade in the first quarter, he expressed hope to sustain and further develop this momentum. Mentioning that the entry into force of the ASEAN-India FTA-in-Goods has contributed towards this buoyancy in trade, he said that he hopes to conclude the ASEAN-India FTA-in-Services and Investment at an early date.

The Minister expressed concern that the investment partnership between the two countries is limited. Though there are several small Indian investors, total Indian investment is not large (US$ 200mn), he said. He expressed hope that the US$ 5 billion TATA Steel investment would be realized soon. The Minister said that this project has the potential to become a symbol of Strategic Partnership between the two countries. Mentioning that some progress has been made in recent weeks, he urged the Vietnam Prime Minister to ensure that a level playing field is provided to TATA Steel and that there is no discrimination against Indian investment. He hoped that the remaining issue of re-settlement costs for the land would be resolved to the mutual satisfaction of all sides and the Investment Certificate for the project would be issued soon. To this, the Prime Minister of Vietnam said that he has already asked the concerned officials to resolve the matter at the earliest.

The Finance Minister expected the Vietnam Government to facilitate the request of two Indian public sector banks, Bank of India and Indian Overseas Bank to open Branch Offices in Vietnam saying that the step would strengthen the economic cooperation between the two countries.

Shri Mukherjee said that India has provided several Lines of Credit to Vietnam and is willing to consider additional Lines of Credit, especially for infrastructure projects in Vietnam.

DSM/BY/GN

Strategic partnership: push to deepen defence, trade and investment ties and secure a level playing field for major projects. The meeting reiterated a Strategic Partnership and committed to deepen defence and intelligence cooperation while noting that bilateral trade and investment remain below potential despite the ASEAN India FTA in Goods. The Minister urged facilitation and non discrimination for a major proposed steel investment, resolution of land re settlement costs, prompt issuance of the Investment Certificate, approval for Indian public banks to open branches, and indicated readiness to provide further Lines of Credit for infrastructure.