Author : Sameer Patil

Expert Speak Raisina Debates
Published on Jun 28, 2022

As Vietnam seeks to diversify its arms purchases, India could emerge as a potential exporter of defence equipment.

The importance of India’s defence partnership with Vietnam

Indian Defence Minister Rajnath Singh recently paid a three-day visit (8-10 June 2022) to Hanoi to strengthen defence and security ties with Vietnam. The two sides discussed regional security issues and signed agreements to expand their defence engagement. These ties assume additional significance in the backdrop of India’s persisting two-year-long Ladakh border stand-off with China and Beijing’s aggressive moves in the South China Sea that directly impact Vietnamese security. Hanoi is keen to engage New Delhi to counterbalance the growing Chinese belligerence in the region and offset the ‘push and pull’ dynamics of its engagement with Russia and the United States (US).

India has also activated a satellite imaging and tracking station in Hanoi, enabling it to track Chinese naval activities in the region.

This bilateral relationship has deepened in the last decade. As expected, maritime security has emerged as a critical area of cooperation. Vietnam has regularly participated in the Milan naval exercise hosted by the Indian Navy. India has also activated a satellite imaging and tracking station in Hanoi, enabling it to track Chinese naval activities in the region. In addition, both sides have had regular military exchanges. Even the COVID-19 pandemic has not hindered it. In March 2020, Vietnam was part of a select “Quad Plus” group of seven countries to discuss the Indo-Pacific region’s response to the pandemic.

During Minister Singh’s recent visit, India and Vietnam signed two key agreements:

    • The first agreement, ‘Joint Vision Statement on India-Vietnam Defence Partnership towards 2030’, casts a long-term perspective on the mutual ties. While contents of the agreement are not available in the public domain, according to officials, it aims to “enhance the scope and scale of existing defence cooperation.”

    • The second agreement, an MoU, focused on mutual logistics support to enable the two countries to use each other’s military bases to repair and replenish supplies. According to the official statement, this agreement is “the first such major agreement which Vietnam has signed with any country.” This arrangement will mainly benefit the Indian Navy as it ramps up its profile in the Indo-Pacific.

Besides, the two countries also agreed to expedite the extension of a US$500-million Line of Credit (LoC) to Hanoi. This LoC, meant for Vietnam’s purchase of Indian arms, was initially announced in September 2016 during Prime Minister Narendra Modi’s visit to Vietnam when the relationship was upgraded to the “Comprehensive Strategic Partnership”. Yet, its utilisation is delayed as both sides negotiated a framework for this LoC only in January 2021. The two countries have been unable to conclude which Indian defence equipment will be procured as part of this LoC.

Vietnam used an earlier US $100 million Indian defence LoC (offered almost a decade ago in 2013) to purchase 12 offshore high-speed patrol boats for its navy.

Vietnam used an earlier US $100 million Indian defence LoC (offered almost a decade ago in 2013) to purchase 12 offshore high-speed patrol boats for its navy. India handed over these boats during Minister Singh’s visit. The delayed LoC utilisation is the only discordant note in an otherwise robust bilateral defence collaboration.

As part of the US$ 500 million LoC, India has offered Vietnam Brahmos cruise missiles, Akash missile air defence system, Varunastra anti-submarine torpedoes, and coastal radars.

Both countries have been in talks about the Akash system since 2017, as Vietnam is looking to replace its ageing Soviet-era S-125/S-75 mid-tier surface-to-air missile systems. Reportedly, the Vietnamese side is envisioning local production of the Akash-NG variant (with a range of 70-80 km.) and therefore, has requested the transfer of technology and joint production of the system. However, any materialisation of this deal is some time away as the missile system is still undergoing testing.

More likely is the purchase of Brahmos missiles, co-developed by India and Russia. After bagging its first export order for the missile from the Philippines earlier this year, India is keen to maintain the momentum by aggressively pitching the missile system to Hanoi. This export push serves the dual purpose of boosting India’s defence industry and arming a key Southeast Asian nation that keeps China on edge. Pertinently, the L&T shipyard had built the offshore boats that India delivered under the US $100 million LoC. Opportunities such as these open up prospects for the private sector to be part of India’s growing defence exports.

The L&T shipyard had built the offshore boats that India delivered under the US $100 million LoC.

Notwithstanding the pro-China orientation of the current political leadership, a key driver of Vietnam’s military build-up is the security rivalry with China. Beijing’s stepped-up aggression to press its territorial claims in the South China Sea dispute has been a significant irritant for Hanoi. Vietnam has been the most vocal amongst the Southeast Asian parties to this dispute. Clashes between the two have increased since May 2014, when Vietnamese naval ships and fishing boats sparred with the Chinese vessels in the disputed Paracel Islands, where China had installed an oil rig. In one incident, a Vietnamese fishing boat sank near the rig after colliding with a Chinese vessel.

Vietnam has traditionally relied on Russia for its weapons. However, given its renewed proximity with the US and the US sanctions against the Russian defence industry, Hanoi has sought to diversify its recent arms purchases, as seen in figure 1.

Figure 1: Trade Indicator Values of Vietnam’s arms imports (2011-2021, figures in US$ millions)

Source: SIPRI Arms Transfers Database

Since the South China Sea clashes, Vietnam has boosted its defence spending, averaging US $4.8 billion between 2014 and 2018. But, compared to the threat posed by China and its military requirements, this spending is inadequate. Therefore, Hanoi is looking for more affordable defence suppliers with this moderate defence spending.

India can potentially be one such source. The Indian military has the advantage of operating similar platforms to Vietnam’s. It has leveraged this by assisting Hanoi in training and capacity building in Kilo-class submarine operations and Sukhoi-30 fighter jet training.

The unrelenting Chinese hostility in the region will ensure that India and Vietnam will continue on the path of cooperation. Moreover, the positive trajectory of both countries vis-à-vis the security ties with the US is another point of convergence. However, to optimise the gains of their collaboration and contribute to regional stability, New Delhi and Hanoi will have to show tangible progress. Perhaps, expeditious utilisation of the defence LoC will unlock the value proposition for both sides. Besides, expansion of defence cooperation will also have a spillover effect of bolstering cooperation in other areas like hi-tech manufacturing and agricultural production.

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Author

Sameer Patil

Sameer Patil

Dr Sameer Patil is Senior Fellow, Centre for Security, Strategy and Technology and Deputy Director, ORF Mumbai. His work focuses on the intersection of technology ...

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