India PM offers Vietnam $500 million credit line for defense cooperation

This was Modi’s eighth meeting with Xi as the Prime Minister.

India also upgraded its relationship with Vietnam from “strategic partnership” to “comprehensive strategic partnership” following delegation-level talks between Prime Minister Narendra Modi and Vietnamese Prime Minister Nguyen Xuan Phuc.

In an interview before his trip, Modi said his visit is meant to further boost bilateral and multilateral engagement and cooperation in many fields, including trade, investment, science and technology, space research, defense and security.

New Delhi’s message to Beijing in recent meetings was that it could not delink bilateral ties from its positions that often oppose India in global fora such as the NSG, where China has sought to delay India’s entry.

“I am also happy to announce a new Defence Line of Credit for Vietnam of Dollars 500 million for facilitating deeper defence cooperation”, he said.

The prime minister called for strengthened partnership with Saudi Arabia in sectors such as maritime, infrastructure, low-priced housing and discussed further cooperation in energy sector, they said. But, Modi’s Vietnam visit will certainly put the Asian giant under pressure.

PM Nguyen also thanked Modi for extending a new Line of Credit of Dollars 500 million for defence co-operation and another USD 5 million for setting up of an Army Software Park at the Telecommunications University in Nha Trang. “For this, the specific actions by both countries would play the major role”, he said.

About 50 per cent of India’s trade passes through the South China Sea, where Beijing has built up islands and outcrops capable of supporting military activities to the chagrin of Vietnam and other claimants.

Analysts say India and Vietnam could complement each other in manufacturing, services, investment banking and other sectors.

While there was no mention of the South China Sea in the leaders’ public statement, the bilateral statement released at the conclusion of the visit devoted a substantial paragraph to the dispute – just as it had in the last such joint statement.

The two countries are celebrating the 45th anniversary of establishing diplomatic ties and 10th anniversary of establishment of strategic partnership in 2017. India and China are partners in long term strategic cooperation. India and Vietnam must also work for direct bilateral connectivity and ease visa regulations for business individuals.

China has also objected in the past to India’s Oil and Natural Gas Commission (ONGC) undertaking exploration at the invitation of Vietnam in the SCS, which is believed to be rich in undersea deposits of oil and gas.

May said she supported Modi’s reform agenda and the United Kingdom was keen to participate in Make in India, Smart Cities and the Skill India Programme among others.

Incursions at Demchok and Chumar in Ladakh in 2014 cast a shadow over President Xi’s visit to New Delhi in September 2014.

“(We) discussed matters concerning the East Sea (South China Sea)”, Mr Phuc told reporters. The two countries can also seek to work together on exploring clean energy solutions and smart grid technologies.