Covid-19 has swept the globe in a tragic way but we should find opportunities in the hardship to ensure the continuity of global supply chains.

Covid-19 also poses opportunities for businesses. Source: Shutterstock

Indian Ambassador to Vietnam Pranay Verma believes that though the global health crisis results in unprecedented challenges, it also poses opportunities to businesses in India and Vietnam.

The ambassador said the unexpected epidemic has challenged many economies in the world and caused some certain impacts on businesses in both India and Vietnam, resulting in disruption in the global supply chain and an increase in prices of input materials to a number of Indian companies.

However, many others at the same time have also made more contracts to meet the need, he said, noting that those specializing in pharmaceuticals, textile, and footwear are among them.

Meanwhile, Vietnamese firms would also boost trade with Indian partners in these sectors as Vietnam is good at textile products while demand for pharmaceuticals remains high, Mr. Verma emphasized.

Facing the situation, the ambassador hoped that both India and Vietnam will find new ways to cooperate to tap potential which is “significant.”

Trade between Vietnam and India in 2015-2020. Source: General Department of Vietnam Customs. Chart: Linh Pham

India is seeking for a US$5-trillion economy and Vietnam is targeting at a US$500-billion economy. To some extent, the two countries have similar goals and they could boost the cooperation for further investment and trade.

In reality, Vietnam’s investment in India remains modest compared to the potential and he expected Vietnamese companies would see more opportunities to invest in the South Asian country.

Whereas, India’s investment in Vietnam is promising. The government of India has also increased official development assistance (ODA) to Vietnam with an estimated US$1 billion for a number of projects, including smart city, pharmaceuticals, infrastructure, renewable energy, textile, footwear, and cultural preservation.

With efforts to boost the economic growth, India has made significant changes in the investment environment over the past few years, offering opportunities for foreign investors, including those from Vietnam, Indian diplomats shared.

Indeed, India moved 79 positions in the World Bank’s Doing Business Ranking to the 63rd in 2019 from 142nd in 2014. The improvement together with a better tax system, increasing investment in infrastructure, and the government’s reduced intervention are among factors forming a better investment environment for foreign investors, according to Rajesh Uike, deputy chief of mission, the Embassy of India in Hanoi.

In terms of trade, the two-way turnover reached US$10.68 billion in 2018, doubling that in 2016. The two countries expect the amount to hit US$15 billion in 2020.

Vietnam’s main staples to India include machines and spare parts, mobile phones and electronic devices, computers and laptops while the country’s imported products comprise of steel, pharma, seafood, cotton, animal feed, among others.