Is it going to be Indian invasion of Vietnam ?

New Delhi, Jul 13 (UNI) India Inc stretching its wings overseas is all too familiar a story now.

However, a lesser known part of this saga are its investments in small, poor and far-off countries, such as Vietnam.

Last year, the outward flow of Foreign Direct Ivestment(FDI) was almost of the same magnitude as the inflows of FDI.

Outward movement of foreign flows from India is now an integral part of the India growth story, which is doing its rounds in the global market place.

While the Corus deal and takeover of Jaguar and Land Rover hogged the headlines of the newspapers, little is known about investments in other parts of the world which are poorer nations, struggling to climb up the economic ladder.

A FICCI study released here today brings out that India is among the top ten investors in Vietnam with 580 million dollars investment in 2006, making Vietnam the biggest receiver of Indian direct investment in Association of South East Asian Nations (ASEAN).

Two of the big ticket investments in Vietnam last year were Essar Group signing an MoU for setting up a hot rolling steel mill worth 527 million dollars and Tata Steel's signing another MoU for putting up a steel complex with an estimated investment of 3.5 billion dollars.

Devasted by American bombings, the Vietnam war took its economic toll. The war lasted a little less than a decade, with full deployment of American combat units from 1965 to 1973, and continued with three American Presidents at the helm. The killings and destruction raised a huge hue and cry all over the globe, including among the public in America and England.

The war had exacted a huge human cost, not to speak off the material loss. In addition to about 58,000 US soldiers being killed, 3 to 4 million Vietnamese and 1.5 to 2 million Laotians and Cambodians lost their lives.

The war was a part of the cold war startegy on the part of America to ward off communism in the area.

The FICCI study says exports of steel, aluminium coil ingots, machinery and equipment, lubricants, clinker, automobile spares and accessories, garments, textiles and footwear accessories and railway equipment to Vietnam hold out immense potential for Indian companies.

The other key areas where Indian exports can make a dent in the Vietnamese market are: Information Technology and IT training, agro and food processing, energy, inluding alternate sources of energy, veterinary manufacturing plant, tea processing machinery, textile machinery, and power transmission and generation.

Co-operation between India and Vietnam is in diverse fields, including culture, tourism, agriculture, aquaculture and transportation.

To boost trade and co-operation between the two countries, India has extended several Lines of Credit to Vietnam and provides 100 scholarships annually for both short and long-term studies, apart from renewal of agreement on bilateral cooperation in science and technology.

The top ten investors in Vietnam are: United States, Korea, India, Singapore, British Virgin Islands, Taiwan, Japan, China, Thailand and Hong Kong.

Bilateral trade between India and Vietnam has been growing rapidly from 72 million dollars in 1995 to over 1,018 million dollars in 2006, with an average growth rate of 20 per cent per annum.

The main items of Indian exports to Vietnam include animal feed ingredients, ordinary metals, plastic materials, pharmaceuticals, machinery and equipment, steel, cotton, medical ingredients, chemical materials, leather&textile material, and pesticides. The major items of Vietnam's export to India are coal, pepper, tea, coffee, cinnamon, rubber, computer hardware and electronic goods.

The rise of Vietnam is a splendid story of growth and develeopment. It is indeed like the mythical rising of the Phoenix.

Vietnam's Gross Domestic Product expanded 6.5 per cent in the first half of this year, while it was 7.36 per cent in the first half of 2006 and 7.91 per cent in the same period during 2007.

The study states that Vietnam has emerged as a favoured destination owing to number of factors. These include Political stability; rich natural resources such as oil, coal and sea food; 60 per cent of human resource are below 30 years of age; and a 3300-km of coast as advantage.

A communist country once, Vietnam has received 15 billion dollars worth of FDI during the first five months of 2008. Besides, foreign investors have put in 600 million dollars in Vietnamese stock market since the beginning of 2008.

Interestingly, communism in Vietnam developed in the context of Vietnam's anti-colonial struggle against France, the growing Sino-Soviet ideological and military conflict, and Vietnam's localisation of foreign influences.

In short the moot question is whether India is going to re-live its past when its influence spread far and wide. Trade and investments are only a harbinger of such an influence.

UNI GS/SR AK CS1257