Article Posted on : - Sep 15, 2014

President Pranab Mukherjee shakes hands with his Vietnamese counterpart Truong Tan Sang at a meeting at the Presidential Palace in Hanoi, Vietnam on Monday. A PTI photo

HANOI (PTI): Strategically important oil and gas cooperation and extension of a USD 100 million credit by India for defence purchases were among the seven pacts inked between India and Vietnam as the two countries called for "freedom" of navigation in the South China Sea, a remark that could irk China which has been claiming territorial sovereignty over the high seas.

The agreements were signed during the second day of the four-day state visit of President Pranab Mukherjee who held talks with his Vietnamese counterpart Truong Tan Sang in Hanoi.

Both the countries decided to strengthen and deepen bilateral ties on the basis of the strategic partnership with focus on political, defence and security cooperation.

They decided to step up collaboration in the economic sector, science and technology, culture and people-to-people links.

In a subtle message to China, India and Vietnam, who established strategic ties in 2007, asserted that the freedom of navigation in the disputed waters of the resource-rich South China Sea should not be "impeded" and called all the parties "concerned" to exercise restraint in this context.

"The leaders reiterated their desire and determination to work together to maintain peace, stability, growth and prosperity in Asia. They agreed that freedom of navigation in the East Sea/South China Sea should not be impeded and called the parties concerned to exercise restraint, avoid threat or use of force and resolve disputes through peaceful means in accordance with universally recognised principles of international law, including the UNCLOS-1982," said a joint communique issued after the meeting.

China has been exerting its influence in these waters which is not taken well by Vietnam and other bordering countries like the Philippines. Beijing has also objected to India's exploration projects in the Vietnamese oil blocks.

Among the seven pacts inked, a Letter of Intent (LoI) was signed between the ONGC Videsh Limited (OVL) and Vietnam Oil and Gas Group (PetroVietnam).

The LoI is aimed at further consolidating cooperation between India and Vietnam in energy sector and pave the way for future collaboration between the two countries.

The two sides urged for "collective commitment" of the concerned parties to abide by and implement the 2002 Declaration on the Conduct of Parties in the South China Sea and to work towards the adoption of a Code of Conduct in the South China Sea on the basis of consensus.

"They called for cooperation in ensuring security of sea-lanes, maritime security, combating piracy and conducting search and rescue operations," the statement said.

India and Vietnam also signed an MoU on extension of USD 100 million Line of Credit to Hanoi for defence procurement.

The pact, inked between the Exim Bank of India and the Vietnamese Finance Ministry, provides a concessional line of credit for procurement of defence equipment from India.

Details of equipment to be procured by Vietnam are under finalisation.