India's investment in Vietnam is not much, but recent information shows that, maybe, a new investment wave is being opened.
Opening a new wave
Once again, expectations of a new investment wave from India to Vietnam were set. That's when Vietnamese Ambassador to India Pham Sanh Chau shared about the new investment plans of Indian investors.
One is the plan of billionaire Gautam Adani, Chairman of Adani Group, the second richest man in India and 24th in the world, with a fortune of up to 71 billion USD. No specific plan has been made yet, but this billionaire, in contact with Ambassador Pham Sanh Chau not long ago, expressed his desire to invest in long-term and large-scale in Vietnam in the near future. energy, port and airport sectors.
"If it becomes a reality, Adani's investment plan will pave the way for a new investment wave from India to Vietnam," said Ambassador Pham Sanh Chau, and hoped that this could become a turning point. very large, helping to increase India's investment in Vietnam tenfold.
According to Ambassador Pham Sanh Chau, besides Adani Group, many other investors are also looking to invest in Vietnam. One of them can be mentioned is the plan to build a pharmaceutical industrial park, with an initial scale of about 500 million USD in Vietnam.
Regarding this project, Indian investors had discussions with a number of localities such as Hai Duong, Bac Ninh, Thai Nguyen... to seek cooperation opportunities. According to Mr. Ramesh Babu, Chairman of SMS Pharmaceutical Group, if this project is successfully built, it will become a "lever" to turn Vietnam into a base for research, development and production. leading pharmaceutical exporter in Southeast Asia.
There is no detailed information about new investment plans of Indian businesses in Vietnam, but it is likely that within the framework of the visit to India of National Assembly Chairman Vuong Dinh Hue, there will be cooperation agreements. signed. And this, although it may not be enough to create a wave, but also brings a "new breeze" in investment and business cooperation between Vietnam and India, which has been quite "modest" in recent times.
In fact, once upon a time, many expectations were also raised about a new wave of investment by Indian businesses. At that time, Tata Group planned to invest 5 billion USD in a steel project in Central Vietnam. Also Tata, but Tata Power, in 2013 was approved by the Vietnamese Government to invest in Long Phu 2 Thermal Power Project, with an investment of 2 billion USD, in the form of BOT. Later that year, Tata Power signed a memorandum of understanding (MOU) with the Ministry of Industry and Trade on the implementation of this project. Not long after that, Tata Power expressed its desire to invest in Long Phu 3 Thermal Power Project, as well as wind power projects in Soc Trang province.
Unfortunately, Tata later withdrew from the steel project in Vietnam. As for power projects, up to this point, there has been no clearer progress.
For the same reasons, if "counting" India's large-scale projects in Vietnam, only the Son Hoa Sugar Factory Project, with an investment of 94.5 million USD in Phu Yen, can only be mentioned. Infra 1 Solar Power Plant Project in Ninh Thuan, 71.9 million USD, or Tata Coffee Project in Binh Duong, 67.5 million USD investment.
Although there are 315 investment projects in Vietnam, but due to the low average size, only 2.9 million USD/project, lower than the average project size of the whole country (11.7 million USD). Therefore, India's total investment capital in Vietnam has just reached over US$991 million, ranking 23rd among countries and territories investing in Vietnam. In which, in 11 months of this year, investment capital from India into Vietnam was only 16.78 million USD.
Find a way to "shake hands" with the opponent
An interesting point in the investment cooperation relationship between Vietnam and India is that both are partners, but also compete fiercely in attracting international investment capital.
In recent years, India has emerged as an attractive investment destination in Asia, with many very good policies. For example, in the middle of last year, India announced that it would spend about $5.5 billion to support 5 mobile phone manufacturing companies with accumulated investment over 4 years from April 2020 out of 133 million USD and has a certain revenue growth year by year. This support will be paid in cash, for high-end product lines, valued at over $200/piece.
At that time, a series of large investors, including Samsung, Apple and manufacturing partners such as Foxconn, Wistron, Pegatron... all "applyed" to be able to receive support from the Government of India in the process. the production of mobile phones. And that is why there have been questions raised, whether Samsung will shift production from Vietnam to India or not?
Although the answer from Samsung is "no such thing", obviously, Vietnam still has to be cautious, especially in the context of competition to attract foreign investment becoming increasingly fierce as today.
The Indian government, with the "Make in India" program, has also announced many preferential investment policies to attract investment and turn India into a high-tech manufacturing center of the world. These policies have brought about positive effects, as foreign investment in India's manufacturing industries has continuously increased.
Despite the pandemic, foreign direct investment into India has grown by 27%, from $51 billion in 2019 to $64 billion in 2020. With such a large capital scale, India has become the next country to go. receive the world's 5th largest foreign investment inflow.
Large market size and attractive policies are the reasons why India has attracted large capital flows. Opportunities for Vietnamese businesses in India, accordingly, have the opportunity to increase. However, according to data of the Foreign Investment Department (Ministry of Planning and Investment), accumulated up to now, Vietnamese investors have only had 9 investment projects in India, with a total registered capital of 6, 03 million USD. Investment projects to India of Vietnamese enterprises are mainly in the field of wholesale and retail, so it is difficult to have the opportunity to break into the "Make in India" strategy.
But "looking" at India, Vietnam will also know more ways to "play" with foreign investors, especially when Vietnam is also implementing the "Make in Vietnam" strategy.
Nguyen Duc (baodautu.vn)