Indian Companies Make Inroads into Vietnam
Aug. 5 – Indian businesses such as the Tata and Essar groups have expressed interest in investing in Vietnam for the market’s “political stability, high economic growth, healthy investment climate and numerous stimuli,” said Vietnamese General Consul Nguyen Viet Hung in Mumbai.
As further evidence of this interest in Asia's newest emerging tiger, India's Bharat Heavy Electricals Ltd. (BHEL), a state-owned company, said it won a two billion-rupee (US$47 million) contract from Vietnam's Nam Chien hydropower company. BHEL said this is its first order from the Vietnamese power sector.The project is located in Muong La, 350 kilometers north of Hanoi, and is slated to be completed by the end of 2010.
Indian companies in the IT, agro and food processing, railways, energy, tea processing machinery, textile machinery, and the power transmission and generation industries are all adopting the China plus one strategy, expanding to fast developing areas such as Vietnam to grab the best opportunities. "Top Indian corporates such as Essar and the Tata Group have made big-ticket investments in projects in that country, and many are considering to increase their presence in the one-party communist state," Ficci's study on India-Vietnam Trade said.
Trade revenues between Vietnam and India reached US$1.54 billion in 2007 against US$1.02 billion in 2006. Both countries have set a target of doubling trade and reaching a volume of US$2 billion dollars by 2010, government sources told the Economic Times.
"India is among top 10 investors in Vietnam. Essar Group is setting up a hot rolling steel mill worth US$527 million in Ba RiaVung Tau and Tata Steel is to set up a steel complex in Thach Khe-Ha Tinh with estimated investment of US$3.5 billion," Ficci said.
Animal feed ingredients are one of the India's largest export items to Vietnam followed by metals, plastics, steel, cotton, pharmaceuticals, and machinery the report said.
Indian exporters are bringing in foreign exchange by selling chemicals leather, textiles and pesticides, while Vietnam exports coal, pepper, tea, coffee, rubber, computer hardware and electronic goods to India.
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