Mr. Indronil Sengupta Mr. Rajeev Singh
Chairman of the Indian Business Chamber in Hanoi (INCHAM Hanoi) Director General of the Indian Chamber of Commerce (ICC)
Ihave been in Vietnam for 17 years, and during that time I have come to understand why the country’s legal framework and business environment are so attractive to foreign investors. The first and perhaps most crucial point is political stability. Vietnam’s stable government, coupled with policies that encourage sustainable investment and business growth, is a key driver of foreign interest. The second point is Vietnam’s demographics. Its population is young, which creates a highly consumption-oriented market. With a population of over 100 million, domestic demand is strong and continues to grow. The third point is the appeal for small and medium-sized enterprises (SMEs). Vietnam has been a major success story with its industrial parks and zones, which make it easier for SMEs to quickly set up business. These industrial parks take care of essential infrastructure like land, electricity, and other utilities, so businesses don’t have to deal with the often complex process of acquiring and preparing land themselves.
When we look at Vietnam and India’s business relationship, it can be viewed from two aspects: trade and investment. On the trade side, we see strong opportunities in sectors like pharmaceuticals, agriculture, information technology (IT), and financial technology (fintech), among others. In terms of investment, energy is one of the sectors in which Vietnam can attract Indian investors. Though Vietnam and India have both been recognized for their rapid development in renewable energy over the past decade, there remains significant potential for investment cooperation between the two in the field of wind energy in the years to come. Moreover, infrastructure, particularly seaports, is another area where Indian investors are looking to increase their investments in Vietnam.
There are already multiple areas where Indian businesses are sourcing from Vietnam, and we are also beginning to see Vietnamese companies sourcing from India. One interesting area is ceramic tiles, where Vietnam has shown growing interest in sourcing from India. Conversely, India is sourcing a significant amount of limestone from Vietnam, particularly for its steel industry. This exchange of goods and resources is a testament to the growing economic ties between the two countries.
This year marks the 25th anniversary of the Indian Chamber of Commerce in Vietnam (INCHAM), and we are celebrating with a series of events designed to build bridges between Vietnamese and Indian businesses. For example, we are co-hosting various events with Indian partners, and are planning an international business event focused on digital and concrete business opportunities. This latter event will provide a platform for both Indian and Vietnamese businesses to engage in discussions about the digital economy, which we believe will be a game-changer for bilateral trade.
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From an Indian perspective, Vietnam presents tremendous opportunities as an investment destination. Over recent years, it has established itself as a key manufacturing hub, driven by favorable government policies. These include regulations around company formation, labor laws, infrastructure development, and, crucially, Vietnam’s robust network of free trade agreements (FTAs). Vietnam has signed FTAs with 60 economies worldwide, offering substantial advantages to companies that choose to set up operations here. These benefit from preferential tariff rates and priority access to markets, making Vietnam an incredibly appealing option.
Similarly, India is also a highly-promising investment destination. With a population of 1.4 billion and a growing middle class, India’s domestic market has become increasingly attractive to both local and international brands. Its rising domestic demand alone creates numerous investment opportunities for foreign businesses, as evidenced by the country ranking among the top 3 in the world for attracting FDI. With increasing incomes, demand among Indian consumers for new products is also on the rise. Therefore, investing in India presents a significant opportunity for Vietnamese businesses as well.
The technology and digital sectors are particularly exciting at the moment. India has built a global reputation in these areas, with many of the world’s largest IT and tech companies being led or significantly staffed by Indians. Domestically, India is home to thousands of fintech companies, and it boasts the highest volume of digital payment transactions worldwide. This presents a great opportunity for collaboration between Indian and Vietnamese tech companies, whether through partnerships or joint ventures. Indian companies can contribute to Vietnam’s digital transformation by working with local companies and the government.
Manufacturing is another key sector, particularly with the rise of Industry 4.0 and smart manufacturing technologies. Given Vietnam’s strategic location within ASEAN and its FTA network, manufacturing here offers strong potential for exporting to regional and global markets.
Additionally, education, skilling, and training represent important areas for collaboration between Vietnam and India. For Vietnam to remain competitive, its younger workforce needs to be well-versed in modern technologies. This is where India’s expertise in education and training can be of great value. Strengthening cooperation in these areas will help Vietnam’s workforce contribute more effectively to the country’s growth. Hospitality also remains a significant area of interest, continuing to draw attention as a major sector for bilateral collaboration.