It gives me great pleasure to address this India-Vietnam Business Meet organized by the Confederation of Indian Industry.
I am happy that a number of important stakeholders from both government and businesses on both sides are participating in this event. I commend CII for actively pursuing the virtual platform to connect our businesses during these difficult times of the pandemic.
I also appreciate that the CII has chosen auto, auto components, IT, pharma and healthcare sectors as the focus of today’s interaction. These are important pillars of the bilateral commercial relations between India and Vietnam.
These areas also offer significant promise for collaboration, given the strengths and capacities of India and Vietnam as well as the growing global demand for products and services from these sectors.
We hope that today’s discussions will explore concrete ways to promote more active collaboration and more intense engagement in each of these sectors. We would also like to see these discussions leading beyond just trade to long-lasting investments as well.
And not just Indian investments coming into Vietnam, but also Vietnamese investments going into India.
We believe that Vietnam’s growing economic and manufacturing capabilities will be of great value for the Indian market. So, we would be happy if Vietnam’s investment potential in India in these segments are also explored.
As you are aware, our Prime Minister’s vision of Aatma-Nirbhar Bharat – which is the Indian phrase for “Self-Reliant India” has brought a new phase of investment opportunities in India, helping India in building capacities at home so that it can become a more effective contributor to the global well-being, can integrate more effectively in the global value chains, and can be of greater utility to our partners. We believe that a “self-reliant India” will be an important platform on which we can build our economic engagement with Vietnam.
Let us begin with Healthcare and Pharmaceutical sector. This is a traditional area in our trade with Vietnam. However, amidst the on-going pandemic, cooperation in healthcare acquires a new meaning – not just in terms of trading in pharmaceuticals and medical devices, but even investments in healthcare facilities and capacity building. India, given its reputation and capabilities in healthcare systems, stands well-positioned to meet some of those expectations and seize some of those opportunities.
The Indian pharmaceutical industry is a major contributor to the global healthcare system with underlying strengths of a large scientific manpower and robust R&D capabilities that have evolved over the last nearly 50 years. Indian pharma companies are today among the most competitive ones in the generic and vaccine space in the world, including in developed economies.
As the ‘Pharmacy of the World’, India has also been at the forefront of the global fight against the COVID-19 pandemic. India has supplied supportive medicines to deal with the pandemic in almost 150 countries around the world. Earlier this month, India has launched the world’s largest ever vaccination campaign in the human history with two “Made in India” vaccines to fight the COVID-19 pandemic.
The opportunities presented by the pharma sector for our two countries have been duly recognized in the India-Vietnam Joint Vision for Peace, Prosperity and People adopted by our Prime Ministers at the Virtual Summit held on 21st December 2020. Their Joint Vision identifies deepening our cooperation in holistic healthcare, vaccines and pharmaceuticals as important elements of our future partnership.
We have seen that while the overall volume of our pharmaceutical trade has remained by and large constant, the proportion of Indian exports in the larger import of pharmaceuticals by Vietnam has gradually declined over the years. There are some regulatory issues that we are trying to resolve with the Vietnamese side, but even within those constraints, we see a lot of scope to enhance our pharma trade with Vietnam.
We also see great opportunities in auto and auto components sector for our business ties. Auto-components is an area where we have seen some consistent growth in our bilateral trade recently, but the volume needs to be scaled up. Last year, our exports of auto-components to Vietnam grew by nearly 15%, but in the overall perspective, only 5% of Vietnam’s total imports of auto components came from India.
One of the major impediments is the current tariff structure for automobiles and auto-components, which is quite disadvantageous for our bilateral trade with Vietnam compared to Vietnam’s tariff regimes with most other trading partners. An early review of our AITIGA with ASEAN would be of immense help in strengthening partnerships and collaboration among our business communities to tap the actual potential of this sector.
Another important step that we are taking is to expedite the implementation of our existing bilateral MOU for mutual recognition of standards and conformity assessment. Our Bureau of Indian Standards and Vietnam’s STAMEQ are currently engaged in this. Once implemented, it will greatly facilitate trading in machineries and spares, including auto-components, through mutual recognition of standards.
India’s own automotive market is expected to be the world’s third largest in terms of volume with a market size of USD $300 billion by 2026. Our Electric Vehicle sector would require financing of about US$ 50 billion by 2030. We would welcome Vietnamese companies to exploit the huge trade and investment opportunities in Indian automobile and auto components Industry.
Coming to the digital sector.
As we know, India is making significant strides in turning itself digital through our “Digital India” mission. Similarly, Vietnam has a vision of becoming a “Digital Society” and is looking at a target of 20% of the GDP coming from digital economy by 2025 and 30% by 2030. In some of the cutting-edge areas like 5G, Vietnam is one of the few countries in the region that are going to roll out 5G networks commercially.
These are some of the larger contexts in which our complementary capabilities and demands can provide great opportunities for our businesses. On our part, we would like to invite Vietnamese companies to explore opportunities in the IT-BPM (Business Process Management) Industry of India which is expected to reach USD 350 billion by 2025. It is indeed an area, where we see Vietnamese companies showing interest in partnering with companies in India. We would be happy to strengthen these engagements.
Ladies & Gentlemen,
One area that I would encourage our businesses to explore is how we can suitably position our products in the supply chains that are linking the economies of this region within itself and with the broader global economy. Vietnam can be a valuable gateway to this end.
I would also encourage a more intense engagement among our SMEs on both sides. They are the key drivers of our future economic prosperity and major pillars of emerging economies such as Vietnam and India.
Another point that I often emphasize is the need to have a target-oriented approach to our economic ties, but targets which are more granular and sectoral, and which are backed by a clear action plan based on a clear understanding of the market opportunities. Our business chambers have an important role to play in this regard. This is a point which has also been emphasized in the Joint Vision adopted by our leaders during the recent Virtual Summit.
Ladies & Gentlemen,
We have set an economic vision of making India a US$ 5 trillion economy over the coming years. This is not just a number that we are talking about. This is also about good governance; enabling grassroots empowerment through participation and technology; and achieving sustainable and inclusive development. This journey from our current US$ 3 trillion economy to US$ 5 trillion economy is going to create capacities and demands which will throw open significant opportunities for our close partners like Vietnam, to engage in our growth story and benefit from it. This is the strategic perspective from which businesses in Vietnam should look at India.
India values Vietnam as an important pillar of its Act East policy and its Indo-Pacific Vision. In both these constructs, we place a lot of importance on 3 C’s – Connectivity, Commerce and Culture. Today’s Business Meet will aid our efforts in strengthening these engagements with Vietnam and facilitate building long-term linkages between our two economies.
Thank you for giving me this opportunity. I wish you all productive and rewarding discussions today.
I would also like to assure you of the fullest support from our Embassy in Hanoi and the Consulate General in HCMC in all your endeavours to promote economic ties between our two countries.
Thank you.
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