Indian PM Narenda Modi did not elaborate on what Vietnam would use the $500 million credit for.
Indian Prime Minister Narendra Modi (L) and his Vietnamese counterpart Nguyen Xuan Phuc at the press conference in Hanoi on September 3. Photo by VnExpress/Giang Huy
Indian Prime Minister Narendra Modi offered Vietnam a credit line on Saturday of half a billion dollars for defense cooperation.
The deal was among a dozen cooperation agreements Modi signed in Hanoi alongside his Vietnamese counterpart, Nguyen Xuan Phuc, on the first visit to the country by an Indian prime minister in 15 years.
India and Vietnam share borders and large trade volumes with China and have repeatedly locked horns with Beijing, over the territorial disputes in the Himalayas and the South China Sea (Vietnam’s East Sea), respectively.
Both are also beefing-up of their defenses and in India’s case, its defense industry, promoting heavily its supersonic BrahMos missile. India is keen to sell the missile to Vietnam and four other countries, according to a government note seen by Reuters in June.
It was unclear if the latest loan included the $100 million India had previously made available to Vietnam for four yet-to-be-built patrol vessels in a deal agreed in late 2014.
In an address to media, Modi said the credit was for “facilitating mutual defense cooperation” and the relationship between the two countries would “contribute to stability, securities and prosperity in this region”.
Modi, who was en-route to a G20 Summit in China, made no mention of the patrol vessels, nor BrahMos missiles, and did not elaborate on what Vietnam would use the $500 million credit for.
The offer comes after a surge of almost 700 percent in Vietnam’s defense procurements as of 2015, according to the Stockholm International Peace Research Institute think-tank, which tracks the arm trade over five-year periods.
The 12 agreements signed on Saturday covered areas like health, cyber security, ship-building, U.N. peace-keeping operations and naval information sharing, including a $5 million deal to build a technology park in the coastal resort city of Nha Trang.
Vietnam is pushing to become a key player in Southeast Asia’s tech scene as it looks to diversify exports beyond manufacturing and agriculture.
Both leaders said ties would be upgraded to the level of “comprehensive strategic relationship” and bilateral trade would be almost doubled to $15 billion by 2020.