Local businesses are eager to learn about the potentials offered by the emerging Indian market, but many of them might be disappointed since India has many export items similar to Vietnam’s.

Some Indian products are even more competitive than Vietnamese goods, heard an o­nline conference o­n the Indian market organized by the Ministry of Industry and Trade o­n Thursday.

Tran Quang Huy, deputy director general of the ministry’s South West Asia and Africa Market Department, said Vietnam and India had a range of similar goods but some Indian goods are better in price and quality, such as textiles, garments, footwear and farm produce.

Vietnam now has a trade deficit with India. In the first five months of this year, Vietnam exported US$483 million worth of goods to India and imported more than US$1 billion worth from India, according to Vietnam’s Customs.

Vietnam is heavily dependent o­n imported materials which are major export items of India, such as materials for production of feed, textiles and garments, footwear, and electronic products.

Nguyen Son Ha, commercial counselor of Vietnam in India, acknowledged an uptrend of Vietnam’s textile and clothing material imports from India. At the moment, India is o­ne of the main material providers for Vietnam’s textile and garment industry.

Vietnam last year imported nearly 66,000 tons of cotton from India, up from the 30,000 tons plus in 2009.

India has a huge supply of leather and skilled labor in the industry, enabling it to become a global center of leather.

India has a big demand for importing fuels, raw materials, unprocessed farm products and consumer goods. However, it is imposing high tariffs, creating challenges for Vietnamese goods to make it to the Indian market.

“It’s not easy for Vietnamese goods to enter India’s market, such as coffee, rubber, pepper, footwear and garments,” said Huy of the South West Asia and Africa Market Department.

Moreover, India is a major producer of chemicals, packaging, and fruit.

Vietnamese businesses in some sectors still have opportunities to export to India, though. Take furniture, computers and construction materials for example, according to the conference. India is in the process of building infrastructure and high-rise apartments.  

A number of Vietnamese goods now enjoy tariff preferences as part of the free trade agreement between India and ASEAN, such as garment, footwear, furniture, coffee, tea, rubber, plastics, chemicals, machinery and equipment, ores and minerals. This FTA took effect in January 1 last year.