India Vietnam Free Trade Agreement Notification
In a major boost to bilateral trade ties, India and Vietnam have recently notified the implementation of the India-Vietnam free trade agreement (FTA) in accordance with the commitments outlined in the pact. The agreement aims to promote trade and investment between the two nations by reducing tariffs on certain goods and easing regulatory requirements for businesses.
The India-Vietnam FTA was signed in 2020, during the virtual summit between the Prime Minister of India, Narendra Modi, and the Prime Minister of Vietnam, Nguyen Xuan Phuc. The pact covers a wide range of sectors including agricultural products, textiles, pharmaceuticals, chemicals, and automobiles. It also includes provisions on intellectual property rights, e-commerce, and dispute resolution, among others.
One of the key benefits of the FTA is the significant reduction of tariffs on imports and exports between the two countries. This means that Indian businesses can export goods to Vietnam at lower prices, making them more competitive in the Vietnamese market. Likewise, Vietnamese firms can export products to India without having to face high tariffs, enabling them to expand their business operations in the Indian market.
The agreement is also expected to streamline regulatory processes for businesses, reducing the time and cost involved in complying with regulatory requirements. This will particularly benefit small and medium-sized enterprises (SMEs) that are often constrained by limited resources to navigate complex regulatory systems.
India and Vietnam have enjoyed friendly relations for several decades, and this agreement is expected to further strengthen their economic ties. Vietnam is currently India’s fourth-largest trading partner in the ASEAN region, with bilateral trade between the two countries reaching USD 11.3 billion in 2020-21. This figure is expected to grow significantly in the coming years due to the implementation of the FTA.
The India-Vietnam FTA is a major milestone in the India-ASEAN economic partnership and is expected to bring significant benefits to both countries. With the implementation of the agreement, Indian businesses will have access to a large and growing market in Vietnam, while Vietnamese firms will be able to expand their operations in India. This is a win-win situation for both nations and sets the stage for further cooperation in the future.