Ajay Dua emphasizes the critical need for India to strengthen its relations with the Indo-China region, particularly with Vietnam, Cambodia, and Laos. This region has historical ties with China, shaped by trade and cultural exchanges, and has undergone significant transformations since French colonization began in the 19th century. Vietnam, which gained independence from France in 1954, has faced numerous conflicts, including those with the U.S. and China. Today, Vietnam boasts a population of 97 million and a per capita income of around $5,000. [fcb19c3a]
In a notable development, Vietnam upgraded its relationship with the United States to a comprehensive strategic partnership in September 2023, reflecting its growing geopolitical significance. However, Vietnam's GDP growth dropped to 5.03% in 2023, with expectations of recovery to 6.5% in 2024. In response, India has extended $300 million in credit for development projects in Vietnam and pledged an additional $500 million for military goods, highlighting the strengthening of bilateral ties. [fcb19c3a]
Bilateral trade between India and Vietnam has reached $12 billion, with potential areas for collaboration including electricity transmission and railway modernization. Both countries stand to benefit from the China Plus One strategy, which encourages diversification of supply chains away from China, thereby enhancing economic resilience. [fcb19c3a]
In addition to Vietnam, India's relations with other Southeast Asian nations, including Myanmar, Thailand, and Cambodia, are also evolving. Myanmar, which shares a 1,500 km border with India, has faced a 12% economic contraction post-COVID and a 29% rise in consumer prices over the past year due to ongoing political turmoil. India has provided humanitarian aid and lines of credit to support Myanmar during these challenging times. [f297aa7b]
Thailand, with a per capita income of approximately $8,000, is projected to see a GDP growth of 2.3%. The country has issued 3.3 million work permits to foreign workers, indicating its openness to international labor. India and Thailand have maintained a bilateral trade pact since 2010, facilitating significant economic exchanges, including the travel of 0.65 million Indian tourists to Thailand last year. [f297aa7b]
To further enhance connectivity and trade, India is actively working on the Kaladan multi-modal transit transport project, aimed at improving transportation links between India and Southeast Asia. Additionally, Google has announced a $4 billion investment in Thailand, signaling confidence in the region's economic potential. [f297aa7b]
Recent developments in Malaysia and Thailand's trade relations, targeting a bilateral trade of $30 billion by 2027, illustrate the growing economic interdependence in Southeast Asia. Malaysia and Thailand are establishing a Trade and Investment Task Force to enhance border trade facilitation and explore cooperation in various sectors, including agriculture and digital environments. [a02a600f] [c130d7f7]