Vietnam and India established diplomatic relationship at ambassadorial level on 1st July 1972. This was a turning point in the relationship between Vietnam and India which opened a new period for the development of multi-facetted relations between the two States and people. To make India soon become a strategic partner of Vietnam, there should be synchronized and comprehensive efforts, especially the reform of economic relations, to promote the relationship between the two countries. It is necessary to define new targets, new approaches and measures to economic relations between Vietnam and India. Based on the traditional relationship, fine political relations, economic cooperation and relations will become strong driver for a sound and long-term development of bilateral political relationship.

 Vietnam and India established diplomatic relations at ambassadorial level on Jan. 7, 1972. That was an important landmark in bilateral relations, which officially opened up a new period for the development of multi-faceted relations between the two States and people.

Vietnam and India established diplomatic relations on Jan. 7, 1972. Over the last 35 years, their bilateral relations have developed vigorously. However, the people from Vietnam and India began to trade and exchange cultural activities thousands of years ago. India�s unique culture and religion have left vestiges on Vietnam�s territory and the bilateral relationship has been maintained through ups and downs in history. This is the foundation for the current long-term and comprehensive friendship and cooperation between the two countries.

President Ho Chi Minh confirmed the long-standing fraternal relations between the two countries. India�s culture and Buddhism were transmitted to Vietnam long ago and these were the only values that peacefully came into the country. After Vietnam wrested back national independence in 1945 and India in 1947, they gradually established their official friendly and cooperative relations. After peace was restored in northern Vietnam in 1954, Prime Minister Javaharlal Neru visited Vietnam and in 1955 Prime Minister Pham Van Dong visited India. The two countries established relations at consulate level in 1956. President Ho Chi Minh visited India in 1958. The official establishment of bilateral diplomatic relations at ambassadorial level on Jan. 7, 1972 was a logical development and culmination of their traditional relationship which has become seasoned and tested over historical periods.

We should look at this event in the setting of the time to see its significance and value. At that time, the Vietnamese people were overcoming final difficulties and hardships in the protracted struggle for national liberation and unification. The upgrading of Vietnam-India diplomatic relations to the ambassadorial level provided great encouragement and spiritual support by India to the Vietnamese people�s just struggle. It showed that the two nations always shouldered and shared joys and sorrows in the most difficult and fiercest periods of time.

Vietnam and India are also loyal friends who share the ideal of national liberation, peace and development. During Vietnam�s war against the US for national liberation, India launched a nation-wide movement, involving people from all political parties and social classes. The demonstrators sang "MERA NAM, TERA NAM, VIETNAM, VIETNAM!"

The Vietnamese people respect the precious fraternity with the Indian people in the past and today. We will never forget the warm and timely assistance given by India during the most difficult periods. India has helped Vietnam in terms of credit, education, science and technology and many other fields. It has been of great significance and practical use for the success of Vietnam�s current national renewal, industrialisation and modernisation and international economic integration processes.

Vietnam�s Party, Government and people have paid constant attention to the development of friendly and comprehensive cooperative relations with India. This is the responsibility of both current and future generations. The relations between Vietnam and India have become an important factor for sustainable development and for peace, stability, friendship, cooperation, development and integration in the region.

Vietnam highly values India�s role and position in the world and fully supports India to become a member of the UN Security Council in the framework of its reform. Vietnam appreciates India�s Look East policy and supports its wish to fully participate in cooperative forums in Asia and the Pacific, particularly the relationship between India and ASEAN in the framework of cooperation and development of the Mekong-Ganga area. Vietnam supports India�s policies and efforts to improve relations with neighbouring countries and to resolve disputes through negotiations in order to build South Asia into a region of peace, stability, cooperation and development.

Vietnam is happy and proud of India�s achievements in its development process. India�s comprehensive reforms implemented since 1991 have been very successful, helping to change its image and strengthen its economy, science, technology, national defence and international position. 450 million Indian people are under 30, speak English and are good at maths. So, with the model of developing services and knowledge, the country has promoted its human resources to develop IT, the manufacturing industry, and agriculture and labour-intensive industries. India has accelerated the liberalisation process and opened the country�s door to take advantage of external resources. India�s economic growth rate over the last three years has reached over 8 per cent. Its GDP in 2005 reached about US$ 750 billion, but its purchasing power parity (PPP) reached more than $3,000 billion, ranking fourth in the world. India leads the developing world in science and technology. It has built a modern scientific and technical research system and employs highly professional scientists in diverse industries. The country has been successful in most scientific fields. These include nuclear energy, space, IT, bio-technology, nano technology, pharmacy, ocean research, natural resource exploration, super-speed computers and air plane technology. India has a stable industrial foundation with key industries serving as the motivation for its economy, including IT, engineering, car manufacture, precious stone processing, pharmaceuticals and textiles. India boasts a mature and developed financial, banking and securities market system, and a strongly developed private economic sector with hundreds of world known economic groups. Such organisations Reliance, Bharat Forge, Ranbaxy, Tata Steel and Infosys with a listing securities value reaching US$ 651 billion, contribute 50 per cent to the GDP. India has spent hundreds of billions of US$ to develop highways, railways, airports and seaports, and establish hundreds of special economic zones. The country has rapidly developed nuclear energy and energy diplomacy with the aim of reducing dependence on oil import (currently India imports 70 per cent of oil). It has overcome social difficulties and sought domestic consensus to open its economy, liberalise the business and investment environment to attract FDI, and conclude trade liberalisation agreements with other countries to increase exports ⁽¹⁾. India has launched the second Green Revolution to increase agricultural productivity and its growth rate to 4 per cent. The country is carrying out many major social programmes to ensure 100 days of work a year for employees. It is also providing lunch for schoolchildren and establishing Internet centers in 600,000 villages in the country as well as reducing poverty, unemployment and illiteracy. It has accelerated administrative reform and the fight against corruption, and implemented measures to limit terrorism, ethnic and religious disputes, improve neighbourliness and establish a peaceful and stable environment for development.

India has successfully amended and implemented a comprehensive external policy, and improved relationships with most of the big countries, particularly the US and China. It has actively participated in and promoted its role in regional and international forums, particularly in the United Nations, non-aligned movement, and East Asian Summit, ASEAN and ASEM. The country has positively supported South-South cooperation and paid further attention to relations with countries such as Brazil and South Africa. India has shifted its focus on economic cooperation in an effort to make the most of foreign markets and energy resources, and, together with other countries, to protect economic interests in international forums.

Looking back at the last 35 years, we are proud of the fine development of Vietnam-India relations. These relations have proceeded with bilateral tradition to attain objectives, which are more significant and realistic for both Vietnam and India.

However, due to subjective and objective reasons, bilateral economic, trade, scientific, technological and educational cooperation remains modest and unequal to their fine political relationship, potential and strengths. It even threatens to lag behind the relations between Vietnam and India with other countries. Their two-way trade turnover makes up a very small part of the total import-export turnover, which is about 0.2-0.3 per cent a year for India and about 0.3 per cent a year for Vietnam. Vietnam�s exports to India make up about 1 per cent of the total export turnover of 10 ASEAN countries to India. India�s investment in Vietnam accounts for a very small part of the total value of FDI in Vietnam. Not many Indian entrepreneurs have invested in areas in which India is strong such as electricity, farm machinery and the computer software industry. Bilateral cooperation in science, technology, education and training is modest compared to need, potential and capacity. Cooperative mechanisms have been applied, but many bio-technology projects in areas of agriculture, healthcare, new-material technology, electronics, non-traditional energy, pharmaceuticals and medicines have not been realised or are delayed. Tours from India to Vietnam and vice versa are not popular. In 2005, only 13,300 Indian travelers visited Vietnam. This figure was small in an population of 1.1 billion given that the number of Indian tourists traveling overseas is averaging about 6 million a year. Meanwhile every year more than 1 million Indian people visit Singapore, Malaysia and Thailand.

The reasons are that both countries have recently adopted an open-door policy, and their economies are not yet very attractive to each other, and they are giving priority to other markets. Vietnam�s businesses do not see the strategic interests in economic relations with India yet, so they do not renew their approach to India in a timely manner consistent with the trend of equality and mutual benefit. They do not contact each other often to understand their capacity and needs. Bilateral trade and investment promotion activities are not often held, particularly from Vietnam. Cooperative mechanisms are not suitable and not enough to facilitate economic contacts. Direct flights between the two countries are not available, and tariff and non-tariff barriers remain.

However, multilateral cooperation, particularly economic cooperation between Vietnam and India has many advantages, which should be explored. These are geo-political, geo-economic, potential resources, the need for reform and the integration and development processes in each country. Consolidating bilateral relations and economic cooperation trends in the region will create favourable opportunities for renewing bilateral economic relations in terms of trade, investment, science, technology and tourism.

Obviously, combined and consistent efforts should be made to soon make India Vietnam�s strategic partner. First of all, comprehensive economic relations between the two countries should be renewed and new indicators, guidelines and measures should be defined to accelerate bilateral economic cooperation. Traditional friendship and good political relations will create a foundation to promote economic relations, while economic relations will serve as a firm and long-term base to develop bilateral political relationships.

We should look back at bilateral relations over the last 35 years and be proud of what has been achieved. We should be confident of future friendship and cooperation between Vietnam and India and be more aware of the need to develop a strategic partnership to raise the bilateral relationship. Cultural similarities and achievements have so far provided the foundation, trust and motivation. Friendship and cooperation between Vietnam and India will be forever strengthened as wished by our predecessors, including President Ho Chi Minh, Prime Minister Javaharlal Neru, senior leaders, and peoples of the two countries.