India discovers a strategic partner in Vietnam
When Idian and Vietnamese politicians sign agreements, listen carefully: you’ll likely hear entrepreneurs rubbing their hands. Companies in Vietnam have been thriving since the economic reforms of Doi Moi swung open its doors to international trade in 1986. Nearly 25 years later the Association of Southeast Asian Nations (ASEAN) and India free trade agreement saw bilateral trade soar between India and Vietnam, reaching an all time high of USD8 billion dollars last year.
Some have even said the partnership could be worth USD20 billion annually by 2020, and there are traders in Vietnam’s commercial capital Ho Chi Minh City who are pushing to make this a reality. Chairman of the Indian Business Chamber (INCHAM), Jay Prakash Shriram, 37, known as Mr. Prakash, sits in the meeting room of his group’s headquarters in District 1.“Membership has constantly been increasing,” he says. “We have close to 300 members in Ho Chi Minh City and 120 in our Hanoi branch.”
Behind him are shelves filled with plaques marking the chamber’s partnerships and charitable contributions as well as a complete list of previous chairmen since its launch in 1999. Mr. Prakash’s name is yet to be inscribed on the board. He’s been in the position for six months and has another six months before his term ends and members elect another leader or choose to re-elect.
“For any two countries to make a more co-operative relationship the economy and commerce plays a very significant role,” he explains. “But it has been a very vast, deep and long relationship between Indian and Vietnam. There are two reasons it is special – economically and emotionally. The first prime minister of India, Jawaharlal Nehru, and the first president of Vietnam, Ho Chi Minh, had a very close relationship. India has been a significant supporter of independence for Vietnam and opposed the Americans in the American War. In times of difficulties during someone’s life somebody who stands behind you becomes really special and that is why India should be special to Vietnam.”
The chamber has been supporting Vietnam in its own way by asking members for donations to local orphanages. It also hosts conferences, networking events and seminars, cultural programs
and celebrations for Indian festivals such as Diwali. Among its members are major corporations such as Standard Chartered Bank and representatives of Unilever.
Flicking through its list of members directory, the word “pharmaceuticals” jumps out on nearly every page. Medicines are a major Indian import for Vietnam – it’s Mr. Prakash’s industry – while other notable imports include animal feed, corn, steel and machinery. Vietnam’s exports to India include electronics (mobile phones and components, computers and electronic hardware), natural rubber, chemicals, coffee and wood products. Although it may not pack the economical punch of major industries, Mr. Prakash also highlights a more clear Indian trade on the streets of Vietnam’s big cities too – restaurants.
Act East
Mr. Prakash hails from the industrious city of Ahmedabad, dubbed “The Manchester of India” despite having more than double the population, where a pharmaceutical company chose him to manage its operation in Vietnam nine years ago. After six years he decided to start his own pharmaceutical and healthcare business, adapting to Saigon’s humidity fairly easily and warming to its friendly people.
He now has a seven-year-old who has lived here all of his life and, Mr. Prakash says, hopes will follow in his father’s footsteps. “It is peaceful here. Safety is a major factor and it is quite safe. Ho Chi Minh City is comparable to Mumbai but, of course, Mumbai is very vast in terms of the growth and population.
“I think the economy is strong here and in the coming times it will get stronger. The trade agreements, the population of Ho Chi Minh City and it being the commercially established city of Vietnam means it is going to grow in the future.”
Vietnam is currently India’s 10th largest trade partner while India ranks 30th on Vietnam’s investment ladder. India’s Look East Policy of the early 1990s represented a desire to cultivate economic and strategic relations with Southeast Asia and counterweight the influence of China. This was twigged last year by Prime Minister Narendra Modi who leads India’s new government into a new era of prioritizing Southeast Asia with the Act East Policy. During Prime Minister Nguyen Tan Dung visit to Delhi last October, India offered a USD300 million line of credit for trade diversification which will enable Vietnam to import more polyester fabrics and yarns from India.
“The only difference with India’s policy now is to put those observations into action,” adds Mr. Prakash. “And I think Vietnam has significant potential in Southeast Asia to be among the strongest players in terms of manufacturing as well as the human resources industry.”
The entrepreneur has noticed certain quirks in the way his compatriots and Vietnamese conduct business. “With geographical changes come cultural changes. There are no significant issues which impacts the business. In India they believe the customer is a god and they show extreme hospitality towards the customer. This can mean extending the hospitality through offering the customer dinner or lunch, treating the customer as a guest. They do this here but a little bit of a difference is the drinking [alcohol] concept which is a bit higher compared to India.”
In 2000, Indian Defense Minister George Fernandes described Vietnam as India’s “most trusted friend and ally.” Mr. Prakash believes this sentiment still rings true today, adding: “Vietnam still remains a very strong partner for India. At the same time I hope Vietnam feels the same. Relationships and co-operation are increasing between the two countries day by day and year by year and I believe Indian commerce makes a difference.”
* Images by Glen Riley
