Recalibrating India-Vietnam economic ties

While the outcome of this high-level visit will unfold in the coming days, three issues merit closer attention; where India and Vietnam stand in their economic engagement, what constrains its full potential, and how the partnership can be deepened in a changing global landscape.

There is little doubt that economic engagement between India and Vietnam has witnessed remarkable progress, particularly after the implementation of the ASEAN-India Trade in Goods Agreement. Bilateral trade has expanded sharply, from about $ 2 billion in 2009 to over $ 16 billion in 2024. This growth has been accompanied by greater diversification, with a broader range of products now being exchanged and a steady expansion in the number of traded tariff lines.

At the same time, early signs of value chain integration are emerging. In electronics, trade now increasingly includes components and intermediate goods alongside finished products. In textiles, India is supplying fibres and yarn while Vietnam is undertaking processing and exports, reflecting a clear division of production roles. Similar patterns are visible in agro-based products, indicating a gradual deepening of production linkages.