Vietnam and India are recording bilateral trade growth that is twice as fast as global GDP growth, creating opportunities for businesses from both countries to collaborate. In this context, power generation and the manufacturing of electrical and electronic equipment are crucial sectors driving the economic development of both nations. H.E. Sandeep Arya, Ambassador of India to Vietnam, made these remarks at the Vietnam-India Interaction in the Electrical and Electronic Sector event hosted by Invest Global in cooperation with the Embassy of India in Vietnam on the afternoon of December 5.

The event was organized on the occasion of the visit to Vietnam from December 5 to 8 by a business delegation from the Indian Electrical and Electronics Manufacturers Association (IEEMA). According to Ambassador Arya, IEEMA is a leading association representing manufacturers of electrical and electronic equipment, industrial electronics, and related accessories. With 900 members, including manufacturers of equipment across the entire supply chain of the power generation, transmission, and distribution sector, generating annual revenue exceeding $50 billion, and with exports surpassing $10 billion, IEEMA contributes 90 per cent of installed electrical equipment in India.

Over the past 20-30 years, the Ambassador noted, many Indian power companies have supplied electrical equipment for large hydropower projects in Vietnam, spanning provinces such as Lao Cai, Quang Nam, Quang Tri, and Son La in different phases. Companies have been operating at varying degrees of activity. For the electrical sector, the total trade value of electrical items between India and Vietnam has recently reached over $200 million. This figure is still modest considering the potential of India and the cooperative capabilities of the two countries, especially given the impressive growth in the electricity, electronics, and related sectors in recent years. The Ambassador also believes that with Vietnam recently approving the National Power Development Plan VIII (PDP8), Indian enterprises will have numerous opportunities for trade cooperation and promotion in the sector.

Regarding the electricity sector, Mr. Vu Quang Hung, Vice President of the Institute of Strategy and Policy Research at the Ministry of Industry and Trade, told the event that Indian businesses have many opportunities to cooperate with Vietnamese enterprises in the future. Specifically, they can participate in investing in power projects, including wind, solar, and gas power. According to Mr. Hung, leveraging their strengths, Indian enterprises can provide equipment for power plants, such as boilers and turbines, or, in the transmission sector, supply equipment, cable systems, and devices for power transmission. Electronic businesses can engage in automation or provide equipment for handling electrical incidents and digital transformation for power supply and production. “Vietnam is moving towards building a smart grid system, so businesses have many opportunities to cooperate in this field,” he told the gathering. “We hope that after this meeting, there will be many MoUs signed on cooperation between Indian and Vietnamese businesses.”

Sharing information about investment and trade cooperation between India and Vietnam, Mr. Nguyen Noi, Deputy General Director of Invest Global, Member of the Executive Committee of Vietnam’s Association of Foreign Invested Enterprises (VAFIE), and former Deputy Director of the Foreign Investment Agency, said India currently has 387 investment projects in Vietnam, with registered capital exceeding $1.1 billion, ranking it 23rd out of 143 countries and territories investing in the country. Bilateral trade between the two countries has recently grown rapidly, reaching $15 billion in 2022, a 13.6 per cent increase compared to 2021. The two countries are aiming for the trade milestone of $20 billion a year.

Regarding investment in the electrical equipment sector, Mr. Noi said Vietnam has a significant need for investment capital. Specifically, under the PDP8, in the 2021-2030 period, the estimated total investment in developing power sources and transmission grids will be around $134.7 billion. This includes approximately $119.8 billion for power sources, or an average of $12 billion a year, and about $14.9 billion for the transmission grid, or $1.5 billion a year. The development of renewable energy, such as wind and solar power, in which Vietnam has considerable potential, is key. Mr. Noi expressed a belief that with India’s leading position in the fields of electronics, information technology, and AI, Indian enterprises are highly likely to succeed when investing in Vietnam in this particular sector.