Exports to India surge thanks to FIEs

An Indian businessman introduces products to Vietnamese partners on the sidelines of the seminar in HCMC on Wednesday - Photo: Thu Nguyet

HCMC – Vietnam’s exports to India have kept rising since the ASEAN-India Free Trade Agreement (FTA) came into forces in 2010, which is greatly attributed to foreign-invested enterprises (FIEs).

Vietnam exported US$992 million worth of products to India in 2010, doubling the figure in 2009, and US$1.55 billion in 2011, up 56.5% year-on-year. In the first nine months of 2012, exports to India amounted to US$1.22 billion.

In addition, Vietnam’s trade deficit with India has been falling, from US$1.2 billion in 2009 to US$754 million in 2010, US$792 million in 2011 and US$375 million in this year’s January-September period.

Tran Quang Huy, deputy director of the South West Asia and Africa Market Department under the Ministry of Industry and Trade, attributed such an export growth to the foreign-invested sector. He was speaking at a seminar on the two-year implementation of the ASEAN-India FTA held by the HCMC Department of Industry and Trade and the WTO Affairs Consultation Center of HCMC on Wednesday.

Cell phones and spare parts exported to India brought in the biggest turnover for Vietnam in 2011, accounting for nearly 24% of the total export turnover from this market. This was owing to mobile phone exports of Samsung, said Huy.

In addition, the second biggest turnover fetched by machines and equipment were mainly attributed to boiler exports of Doosan Vina.

Meanwhile, exports of pure Vietnamese items such as farm produce, coal, pepper, chemicals and wood generated quite modest turnovers.

Vietnamese exporters have not made full advantage of the ASEAN-India FTA. In the year’s first half, Vietnamese goods using C/O form Al to enjoy FTA tariff incentives when exported to India were valued at US$150 million only.

The advantageous products of Vietnam, such as apparels, leather-shoe, plastic, machines and equipment will have a slow tariff reduction schedule. Meanwhile, seafood, vegetables and processed food are in the exclusive list, meaning India does not commit to lower duties on these items.

As for pepper, tea and coffee, India has pledged to slash tax rates from 90-10% to 40-50% on December 31, 2019, heard the seminar.

The Saigon Times Daily