Removing barriers, activating trade connection between Vietnam and India

The purpose of this working trip is to emphasize efforts to maintain the growth rate of agriculture, forestry, and fisheries exports and diversify markets in the context of a slumping global market.

India has the largest population in the world (more than 1,4 billion people) and the world's fifth biggest economy. Recently, the Indian economy has been thriving. India has the fastest-growing economy in the globe, with a 5.6% average growth in gross domestic product over the past decade.

In 2022, the GDP per capita was USD 2,379. If it can maintain its momentum, India will overtake Germany as the world’s fourth-largest economy in 2026 and knock Japan from the number three spot in 2032. When multinational corporations diversify their supply chains away from China, India benefits.

India is one of the largest and most promising markets for agricultural consumption. However, bilateral trade and agro-forestry fisheries trade between Vietnam and India have been modest.

Even though trade between Vietnam and India reached a record high of USD 15 billion in 2022, it accounted for only 1.1% of India's total trade volume. Particularly in terms of agro-forestry-fisheries trade, trade turnover between the two sides is also very modest at only USD 1.87 billion in 2022. The import-export revenue of India's agroforestry-fisheries products is estimated at USD 1.42 billion, while Vietnam's exports only reached USD 465 million, resulting in a trade deficit of USD 953 million.

Vietnam and India have a long-standing and traditional friendship. India is one of four nations that have formed a comprehensive strategic partnership with Vietnam. However, the agro-forestry-fisheries trade between the two nations is quiet.

The high tariff and non-tariff barriers of India for Vietnam's agro-forestry-fisheries products, such as the imposition of a floor price for importing pepper and cashew nuts from Vietnam, are one of the obstacles that impede agro-forestry-fisheries trade.

The enterprises of both sides lack information regarding market demands, import regulations, distribution channels, and export focal points, among others. In this context, the MARD delegation, led by Minister Le Minh Hoan pays a bilateral visit to India bilaterally and attends the G20 Agriculture Ministerial Meeting. This is Vietnam's first agricultural ministerial visit in the past ten years. On June 14, the very first day of the meeting, MARD Minister Le Minh Hoan and the delegation met India's Minister of Commerce and Industry.

During a meeting with Minister of Commerce and Industry Piyush Goyal, the two parties discussed the challenges and barriers in the bilateral agro-forestry-fisheries trade, the trade relationship between India and ASEAN, the open market for agro-forestry-fisheries products, and the desire for Vietnam to host the World Pepper Organization (IPC) Secretariat's headquarter from Jakarta, Indonesia to Ho Chi Minh City, Vietnam.

Straightforward dialogues are essential for enhancing mutual understanding and paving the way for specialized agencies on both parties to facilitate agro-forestry-fisheries trade. Minister Le Minh Hoan, stated that the two parties should create favorable conditions for trade and initiate a new, more vibrant chapter for the agro-forestry-fisheries trade, which has been still in recent years.

Next, the delegation in collaboration with the Vietnamese Embassy in India and the Federation of Indian Chambers of Commerce & Industry (FICCI) co-held the Vietnam – India Agribusiness Connection Forum. The event brought together 50 Indian businesses and the heads of four Vietnamese associations, including the Vietnam Pepper Association, the Vietnam Coffee-Cocoa Association, the Vietnam Rubber Association, and the Vietnam Cashew Association.

Minister Le Minh Hoan, speaking at the forum, wished for enterprises of the two countries to connect to promote trade and investment in the field of agro-forestry-fisheries, which is an untapped potential for realizing the traditional friendship between Vietnam and India and reaffirming the pillar role of the commercial economy in the Vietnam-India relationship.

At the Forum, FICCI representatives lauded the rapid growth of Vietnam's agricultural sector and wished to learn more about the connection between Vietnam's agricultural value chains and those of other nations.

Minister Le Minh Hoan stated at the forum that Vietnam desires to connect with and learn from Indian businesses in the application of science-technology and digital technology to develop Vietnam's green, ecological, and sustainable agriculture. As a result, contributes to global food security and sustainable development.

Even though the agro-forestry-fisheries trade relationship between Vietnam and India is still relatively quiet, Minister Le Minh Hoan and the representative of FICCI have stated that the two sides will promote cooperation for a prosperous future in agro-forestry-fisheries trade - investment relations between Vietnam and India. Following Minister Le Minh Hoan's speech, the associations and businesses of the two parties engaged in business connections and exchanges.

Throughout the working program, the Delegation will continue to meet with the Indian Department of Agriculture & Farmers Welfare, the Club of Indian Business Executives, and bilateral working sessions with the Ministers of Agriculture of G20 countries to facilitate trade, connect trade - investment in the fields of agro-forestry-fisheries.