India extends $300 million line of credit to Vietnam for defense procurement

India extended a $300 million line of credit to Vietnam for defense procurement as part of cooperation to ensure greater stability in the wider Indo-Pacific region, a joint statement said. 

The agreement to this effect was signed between Vietnam’s ministry of finance and Export-Import Bank of India on Thursday during Vietnamese Prime Minister Pham Minh Chinh’s visit to New Delhi. 

A joint statement issued by the two countries said that during the meeting between Prime Minister Narendra Modi and Pham, the leaders agreed to further enhance defense cooperation based on mutual interest and priorities of the two countries which will also contribute to greater stability in the wider Indo-Pacific region.

“The leaders welcomed the signing of loan agreements under the $300 million line of credit extended by the Government of India to the Government of Vietnam for defense procurement and agreed to expeditiously implement the projects under it,” the statement said. 

Pham, who landed in New Delhi on Tuesday, was accompanied by a high-level delegation including several ministers, deputy ministers and business leaders.

Several agreements were signed between the two nations during Pham’s visit, including a memorandum of understanding (MoU) for cooperation in customs capacity building. 

An MoU between Central Agricultural University, Imphal, Manipur and Vietnam Academy of Agricultural Sciences, Hanoi for cooperation in agricultural research and education was also signed.

Vietnam’s ministry of justice and India’s ministry of law and justice signed an MoU on cooperation in the legal field.

Prasar Bharati and Vietnam’s state media, the Voice of Viet Nam (VoV), also signed an agreement for cooperation on radio and television .

An agreement for cooperation on medicinal plants was signed between the traditional medicine administration ministry of health and the national medicinal plants board, ministry of ayush. 

The two countries will also jointly develop the National Maritime Heritage Complex (NMHC) at Lothal, Gujarat.

Besides, India and Vietnam discussed a plan of action for the implementation of the Comprehensive Strategic Partnership during the 2024-2028 period.

Modi and his Vietnamese counterpart reviewed the deep-rooted and long-standing friendship between India and Vietnam and expressed their satisfaction with the strong development of bilateral relations since the elevation of the relationship to Comprehensive Strategic Partnership in 2016, the joint statement said.

“The leaders agreed that the current geo-political realities call for closer cooperation between India and Vietnam. They recognised convergence in their world view and expressed support for a greater voice and role for Global South in international affairs. The leaders agreed to further strengthen the Viet Nam – India Comprehensive Strategic Partnership in all areas,” the statement said.

India and Vietnam have become key partners in recent years, with the bilateral trade increasing to $14.36 billion in 2023 from roughly $200 million in 2000.

For India, Vietnam is the 21st largest trading partner and the 22nd largest export destination globally. For Vietnam, India is the eighth largest trading partner.