Article Posted on : - Sep 05, 2016

Prime Minister Narendra Modi with his Vietnamese counterpart Nguyen Xuan Phuc during a joint statement in Hanoi, Vietnam on Saturday. Photo: PTI.

HANOI (PTI): India on Saturday extended a USD 500 million line of credit to Vietnam to deepen their defence cooperation and signed 12 agreements including a deal to construct offshore patrol boats, amid China's muscle flexing in the disputed South China Sea and "emerging regional challenges".

Prime Minister Narendra Modi, who held wide-ranging talks with his Vietnamese counterpart Nguyen Xuan Phuc here, said the two countries have decided to elevate their strategic ties to a Comprehensive Strategic Partnership to provide it a new momentum.

"Our decision to upgrade our Strategic Partnership to a Comprehensive Strategic Partnership captures the intent and path of our future cooperation. It will provide a new direction, momentum and substance to our bilateral cooperation," said Modi, who arrived here yesterday on his maiden visit to this key south east Asian nation.

Vietnam had earlier Comprehensive Strategic Partnership only with Russia and China.

"I am also happy to announce a new Defence Line of Credit for Vietnam of USD 500 million for facilitating deeper defence cooperation," Modi said after the signing of the agreements.

The 12 agreements were signed in a wide range of areas covering defence, IT, space, cyber security and sharing white shipping information in presence of Modi and Phuc.

"The range of agreements signed just a while ago point to the diversity and depth of our cooperation," he said, adding the agreement on construction of offshore patrol boats is one of the steps to give concrete shape to the bilateral defence engagement.

Modi described his talks with Vietnamese counterpart as "extensive and very productive" and said they covered the full range of bilateral and multilateral cooperation.

"We have agreed to scale up and strengthen our bilateral engagement. As two important countries in this region, we also feel it necessary to further our ties on regional and international issues of common concern," said Modi, who is here on a day-long visit.

"We also recognised the need to cooperate in responding to emerging regional challenges," the Prime Minister said, without naming any country.

China is involved in a raging dispute with the Philippines, Vietnam, Taiwan, Malaysia and Brunei over ownership of territory in the South China Sea (SCS), a busy waterway through which India's 50 per cent trade passes.

China has also objected in the past to India's Oil and Natural Gas Commission (ONGC) undertaking exploration at the invitation of Vietnam in the SCS, which is believed to be rich in undersea deposits of oil and gas.

India and the US have been calling for freedom of passage in the international waters, much to the discomfort to Beijing, whose claim over SCS was recently struck down by an international tribunal in favour of the Philippines.

"Our common efforts will also contribute to stability, security and prosperity in this region," Modi said.

Officials in response to a question on Vietnam's request to India to supply BRAHMOS missiles recently said that both sides are engaged in "robust" conversation on stepping up cooperation in various areas including defence.

Vietnam has shown a keen interest cooperating with India in air and defense production. India's L&T will build offshore high speed patrol boats for Vietnamese Coast Guards, while a pact was signed on cooperation in UN peacekeeping matters.

Indian Navy and Vietnam Navy will cooperate in sharing of white shipping information.

Modi said as the two important countries in this region, India and Vietnam feel it necessary to further their ties on regional and international issues of common concern.

The Prime Minister also announced a grant of USD 5 million for the establishment of a Software Park in the Telecommunications University in Nha Trang.

"We agreed to tap into the growing economic opportunities in the region," said Modi, the first Indian premier to visit the Communist country in 15 years.

Noting that enhancing bilateral commercial engagement is the strategic objective of the two nations, he said, "For this, new trade and business opportunities will be tapped to achieve the trade target of USD 15 billion by 2020."

Besides seeking facilitation of ongoing Indian projects and investments in Vietnam, Prime Minister Modi said he has invited Vietnamese companies to take advantage of the various schemes and flagship programmes of the Indian government.

"As Vietnam seeks to empower and enrich its people, Modernise its agriculture; Encourage entrepreneurship and innovation; Strengthen its Science and Technology base; Create new institutional capacities for faster economic development; and Take steps to build a modern nation, India and its 1.25 billion people stand ready to be Vietnam's partner and a friend in this journey," Modi said.

Speaking about the framework agreement on Space Cooperation, he said it would allow Vietnam to join hands with Indian Space Research Organisation to meet its national development objectives.

Hoping for an early establishment and opening of the Indian Cultural Centre in Hanoi, he said, "The Archaeological Survey of India could soon start the conservation and restoration work of the Cham monuments at My Son in Vietnam."

He also thanked Vietnam's leadership in facilitating inscription of Nalanda Mahavihara as a UNESCO World Heritage site earlier this year.

India and Vietnam also signed an agreement on celebrating 2017 as 'The Year Of Friendship'.

Noting that ASEAN is important to India in terms of historical links, geographical proximity, cultural ties and the strategic space that the two sides share, he said, "It is central to our 'Act East' policy. Under Vietnam's leadership as ASEAN Coordinator for India, we will work towards a strengthened India-ASEAN partnership across all areas."

Modi also expressed the need to "stay focussed to keep up the momentum" in bilateral ties and invited the Vietnamese leadership to India.