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Biman Mukherji

India and Vietnam could turn their competition for “China plus one” investments into a complementary partnership, analysts say, combining New Delhi’s scale and technology capabilities with Hanoi’s manufacturing agility and links to East Asian supply chains.
Such a shift could deepen both nations’ roles in global production networks across high-value industries – from electronics and pharmaceuticals to renewable energy – while giving companies reliable alternatives as they diversify supply chains beyond China.
The idea has gained momentum after Vietnamese Prime Minister Le Minh Hung called for closer economic integration with India, including new economic corridors and supply chains and a potential bilateral free-trade agreement.
During a meeting with Indian Prime Minister Narendra Modi in Delhi on Saturday on the sidelines of the Brics summit, Le urged both countries to accelerate a review of the Asean-India Trade in Goods Agreement – a pact launched in 2010 to lower tariff barriers between India and members of the Association of Southeast Asian Nations.
According to an Indian government statement, the two leaders also reviewed progress made since ties were elevated in May to an “enhanced comprehensive strategic partnership” during a visit by Vietnamese President To Lam. The nations have set a target of boosting bilateral trade to US$25 billion by 2030, up from US$18.28 billion in 2025–26.
From competition to complementarity
Experts said a deeper partnership could reinvigorate a range of industries while strengthening global supply-chain resilience.
“The real significance of the proposal is larger than tariff reduction,” said Swaran Singh, a former professor of diplomacy and disarmament at Jawaharlal Nehru University’s School of International Studies in Delhi. He added that both nations should look beyond a preferential trade pact to co-creating integrated supply chains.
Both India and Vietnam have actively sought to take advantage of the “China plus one” strategy, which accelerated following pandemic-era supply disruptions as global firms sought to diversify.

Vietnam has emerged as one of the premier and most successful beneficiaries of this supply chain diversification, with small and lean facilities across electronics assembly, garments, footwear and technology components.
“The shift that needs to be effected is one from ‘China plus one’ competition to ‘China plus one’ complementarity,” Singh said.
Vietnam excelled in export-focused manufacturing and integration with East Asian supply chains, while India brought vast domestic market scale, design capabilities and digital services expertise, he said.
“Instead of competing for the same factory, the two can collectively calibrate their respective niches in the value chains,” Singh added. “The strategic prize will be the creation of a South and Southeast Asian production corridor connecting Indian scale with Vietnamese manufacturing agility.”
While a free-trade agreement could unlock business opportunities in pharmaceuticals, agriculture, electronics, machinery and services, Singh said the true test would be reducing non-tariff barriers, streamlining administrative procedures and improving cross-border logistics and investments.
Deepening ties
Indian officials say Vietnam is a core pillar of Delhi’s “Act East” policy – an initiative aimed at deepening economic and security ties across Southeast and East Asia – as well as its broader Indo-Pacific maritime doctrine.
Ajay Srivastava, founder of the Global Trade Research Initiative, said that the existing Asean-India free-trade agreement already provided zero-duty access to more than 80 per cent of bilateral trade by value.

During the financial year ending March 2026, Indian exports to Vietnam, including meat and aluminium products – reached US$6.7 billion, while imports from Vietnam totalled US$11.6 billion, dominated by electronic products.
“Before negotiating a separate FTA, both governments should assess why existing Asean–India FTA preferences remain underused and identify areas where deeper commitments could generate new and more balanced trade,” Srivastava said.
He highlighted electronics, semiconductors, precision manufacturing, pharmaceuticals and food processing as key sectors for mutual integration. Combining maritime capabilities – ranging from port connectivity and shipbuilding to joint naval exercises – could help support a rules-based order in regional sea lanes.
Vietnam has long voiced concern about China’s growing maritime assertiveness in the South China Sea, making security cooperation with India an attractive counterweight.
“A partnership with India gives Vietnam fresh sources of military technology, maritime cooperation and potentially, defence co-production,” said Uday Chandra, an assistant professor at India’s Ashoka University. “Both India and Vietnam would also favour free navigation and open seas, whether around Malacca or in the South China Sea.”
“In other words, this is about China, but also beyond China,” Chandra added.
Jamus Lim, an associate professor of economics at the ESSEC Business School Asia-Pacific, said that Vietnam’s interest in Indian investment naturally aligned with Delhi’s dominance in generic pharmaceuticals and back-office technology.

“These are natural areas where Vietnam would particularly welcome foreign investment,” Lim said, adding that Hanoi was following a playbook used by newly industrialised economies that relied heavily on foreign investment to build up industrial capacity.
Lim added that diversifying foreign investment away from a heavy reliance on Beijing remained a priority for Hanoi.
“I suspect that the diversification of its main investment partner – especially from China – is also at the back of the mind of Vietnamese officials, who understand that its symbiotic relationship with southern Chinese firms and investors often comes with the risk of becoming a client state of China,” Lim said.
However, balancing these relationships would require careful diplomacy. “Vietnamese officials will have to tread carefully, since they certainly do not wish to alienate the otherwise healthy economic ties between their country and China, even as it seems to strengthen its relationship with India,” he said.


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India

Indian Prime Minister Narendra Modi and Vietnamese Prime Minister Le Minh Hung in New Delhi during the Brics summit on Saturday. Photo: Handout via Reuters

Workers assemble electric vehicles at a VinFast factory in Hai Phong, Vietnam, in September 2023. Photo: AP

Cargo operations at Hai Phong port in Vietnam in April 2025. Photo: Reuters

Workers at a pharmaceutical manufacturing facility in Dholka, India, in April 2025. Photo: Reuters

Vietnam, India seek closer ties to hedge against dependence on superpowers

Indian Prime Minister Narendra Modi meets Vietnamese President To Lam before their talks at Hyderabad House in New Delhi on Wednesday. Photo: EPA

India’s President Droupadi Murmu, alongside Prime Minister Narendra Modi, poses for a photograph with her Vietnamese counterpart To Lam at the presidential palace in New Delhi on Wednesday. Photo: AFP

Indian Army’s BrahMos missile system (left) takes part in the country’s 2025 Republic Day parade in New Delhi. Photo: AFP

India scores Brics win with joint declaration despite divides

India’s Prime Minister Narendra Modi attends the Brics summit in New Delhi on Sunday. Photo: Indian Press Information Bureau/AFP

Russia’s President Vladimir Putin (left), India’s Prime Minister Narendra Modi (centre) and China’s President Xi Jinping (right) attend the Brics summit in New Delhi on Sunday. Photo: Indian Press Information Bureau/AFP

Modi (right) speaks with Indonesian President Prabowo Subianto (centre) and Philippine President Ferdinand Marcos Jnr during the Brics summit in New Delhi on Sunday. Photo: Indian Press Information Bureau/AFP 

Delegates attend a session on the second day of the 18th Brics summit in New Delhi on Sunday. Photo: Government of India/dpa 

Bangladesh draws closer to China in ‘political chessboard’ to balance India ties

Chinese President Xi Jinping meets then Bangladeshi interim leader Muhammad Yunus in Beijing in March last year. Photo: Xinhua

A J-10CE fighter jet undergoes testing in Chengdu, China. Photo: Handout

Indian Foreign Minister Subrahmanyam Jaishankar (right) shakes hands with his Bangladeshi counterpart Khalilur Rahman during a meeting in New Delhi in April. Photo: AFP/India’s Ministry of External Affairs

A group of Bangladeshis celebrate the resignation of then prime minister Sheikh Hasina in Dhaka on August 5, 2024. Photo: Reuters

Vietnam’s To Lam visits Russia and France amid South China Sea tensions

To Lam, Vietnam’s president and general secretary of its Communist Party, waves to members of a welcoming delegation in Moscow on Monday. Photo: Reuters

A satellite view of Yagong Reef in the Paracel Islands of the South China Sea on August 17. Photo: Vantor / Reuters

Russian President Vladimir Putin (left) shares a toast with Vietnam’s To Lam in Hanoi in 2024. Photo: AFP / Getty Images / TNS

Vietnam’s To Lam gestures as he walks with Myanmar’s Min Aung Hlaing (right) at the National Assembly building in Hanoi on Saturday. Photo: AFP

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New Delhi and Hanoi are looking to join market scale with manufacturing capacity to build new trade links, analysts say


New Delhi and Hanoi are looking to join market scale with manufacturing capacity to build new trade links, analysts say.


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Global Trade Research Initiative

India and Vietnam aim to turn ‘China plus one’ rivalry into trade gains

.css-1c6uqr6{color:inherit;font-weight:inherit;font-size:inherit;font-family:inherit;line-height:inherit;overflow-wrap:break-word;}New Delhi and Hanoi are looking to join market scale with manufacturing capacity to build new trade links, analysts say

New Delhi and Hanoi are looking to join market scale with manufacturing capacity to build new trade links, analysts say