The visit of Vietnam’s top leader and General Secretary of Vietnam Communist Party Nguyen Phu Trong beginning on Tuesday is expected to lend clarity to India’s quest for greater intensity in bilateral energy, defence and economic ties, said official sources in the Ministry of External Affairs (MEA).

Economics will be the driving force of bilateral ties in future with India looking for opportunities in setting up refineries and the Tatas looking forward to setting up a 1,320-mw thermal power project after the failure of its $5 billion plan to set up a steel plant.

The India-Vietnamese project that has garnered the most attention — allocation of two oil blocks in Phu Khanh basin of South China Sea that is contested by China — could get a quiet burial after Beijing offered to Hanoi a joint approach on economic issues and has taken to discussing the sovereignty issue with ASEAN as well as bilaterally with Vietnam.

Official sources gave hints about India planning to withdraw from prospecting for block 128 on commercial considerations just like it returned block 127 about four years back.

ONGC Videsh Limited (OVL) has conveyed to the MEA about the need to relinquish this block which it has had to hold on due to foreign policy considerations despite clear indications about low prospects. OVL has time till next year to hand back the block and the feeling here is that with techno-economic surveys proving to be disappointing, it would be prudent to walk away and look at other opportunities opening up in the hydrocarbons sector.

Defence and security is another area where both sides are keen to add more content. India and Vietnam already have enabling agreements in place and are looking to build on the strong defence training programme, frequent exchange of visits and training of Vietnamese submariners.

India has already offered a $100 million credit line for the purchase of offshore patrol vessels but official sources remained non-committal of prospects of Indian defence exports, especially the Brahmos missile, although China’s close ally Russia has been enhancing its defence ties with most major countries in the rim including Vietnam, Indonesia and Malaysia.

By Sandeep Dikshit - The Hindu - November 19, 2013

Vietnam appreciates India's role in South China Sea

Vietnam, on Monday, appreciated India's "constructive role" in the disputed South China Sea region notwithstanding China's objections to Indian involvement in that area.

General Secretary of Communist Party of Vietnam Nguyen Phu Trong, who will arrive in New Delhi on a four-day trip on Tuesday, also stressed the need for a long-term settlement of the vexed issue on the basis of international law,particularly the 1982 United Nations Convention on the Law of the Sea which has been opposed by China.

The Vietnamese leader, who will be visiting India on the invitation of Prime Minister Manmohan Singh, will hold talks with the top leadership on key bilateral and regional issues which may include South China Sea territorial dispute between China and its neighbours.

"I believe that peace, stability, maritime security and cooperation for mutual benefits in the East Sea represent the essential interest of countries within and outside the region. We highly appreciate India's constructive position on this issue," he told news agencies in an interview.

Despite China's objections to Indian oil exploration in South China Sea, Vietnam has been asserting that India has the right to pursue oil exploration there as they were within Vietnamese "exclusive economic zone".

"In the immediate term, all parties must strictly observe the Declaration on the Conduct of Parties in the South China Sea between ASEAN and China and accelerate the development of the Code of Conducts of Parties in the South China Sea," Nguyen said.

India has been maintaining that all concerned countries must respect principles of international law in resolving the issue while asserting that freedom of navigation and access to resources in the area must be ensured in accordance with laid down principles.

The leader said though Vietnam was satisfied with level of cooperation with India in diverse sectors, still it feels "huge room" remained in further enhancing ties.

"We have the grounds to be satisfied with the achievements obtained in the promotion of Vietnam-India ties in recent years, as well as to look forward to and believe in a stronger relationship in the future. We are fully aware that there remains huge room for expanding, deepening and raising the productivity of bilateral ties.

"One of the main objective of our visit to India is to discuss with the Indian leaders and set out concrete,effective measures and direction aimed to deepen and add more substances to the Vietnam-India strategic partnership and translate potentials into reality in the interest of the two countries' people," he said.

Seeking expansion of ties in new areas, Nguyen hoped his visit will open more avenues of cooperation between the two countries, saying it will provide "building blocks" for uplifting Vietnam-India strategic partnership to a higher level.

"It is the desire and commitment of the government and people of Vietnam to further consolidate and strengthen the friendship and cooperation between two countries in the future," he said.

"The close friendship between Vietnam and India is deeply rooted in not only our shared cultural values and similarities in many aspects but also our solidarity during the struggle for each country's independence and the close friendship between our leaders, including Ho Chi Minh, Gandhi, and Nehru," Nguyen said.

On the economic cooperation, he said it has been growing fast in "scale, scope and forms".

At present, India exports goods like pharmaceuticals, cotton and electrical machinery while imports iron, steel , vehicles and mineral fuels to Vietnam. The bilateral trade between the two countries stood at around USD four billion last year.

About defence ties between the two countries, he said cooperation has been promoted in "information exchange, policy consultation, sales of equipment, training defence technology, nontraditional security issues etc."

The two sides have enhanced military ties with each other in recent years and during the Defence Secretary-level talks earlier this month, they are understood to have discussed the regional security situation including that in the South China sea.

Talking about India's relation with ASEAN, Nguyen said the cooperation has been on the rise.

"Given the convergence of ASEAN's policy to strengthen relations with India and India's 'Look East Policy' the two sides decided to elevate relations to strategic partnership in 2012, marking a new milestone in the ASEAN-India cooperation," Nguyen said.

India is ASEAN's sixth largest trading partner with two- way trade of nearly USD 72 billion, which is expected to reach USD100 billion in 2015.

In the coming period, the two sides need to enhance comprehensive connectivity, particularly in transport infrastructure, trade cooperation promotion, investment, science and tourism, to early conclude the Agreement on services and investment towards the establishment of a Free Trade Area, Nguyen said.

Also they should "promote cooperation in responding to non-traditional security challenges and close coordination in ASEAN-led regional mechanisms," he said.

"As an active member of ASEAN and a close friend of India, Vietnam will spare no efforts to strengthen the strategic partnership between ASEAN and India," the Vietnamese leader said.

Press Trust of India - November 18, 2013