Vietnam hopes for more Indian investment in agriculture

India, the country known for its green revolutions, still lagged behind many other countries in agricultural investment in Vietnam.

 

This was highlighted in the India-Vietnam Investment and Trade Opportunities seminar and attended by members of the Indian business community based in Vietnam, government officials and Indian diplomats.

 

As both were basically agrarian economies, the two countries had many similarities presenting chances for co-operation and investment. "Indian investment in agriculture falls far short of its potential even though India has helped us train high-quality human resources in the field," said Pham Cong Dung, head of Vietnam's Ministry of Agriculture and Rural Development's Department of Agriculture, Forestry and Fishery Products Processing and Trade.

 

Dung noted that India came behind Taiwan, South Korea, Japan, Malaysia, Thailand and France in terms of the number of agricultural projects in the country. "Either Indian businesses have different interests or we have failed to advertise agricultural investment opportunities to them," he said.

 

Dung said Vietnam needed large investment in animal feed and pesticide, noting that India ranked second and third as Vietnam's provider of the two commodities respectively.

 

Foreign direct investment in agriculture had so far focused on exploiting available land and human resources, rather than science and technology-intensive projects like breeding vegetables and livestock, he said.

 

Dung cited agricultural product processing, animal farming, animal feed, forestry and wood processing as the main areas needing foreign investment. Investors in the sectors would be given tax and land rent incentives with total exemptions in some cases.

 

"We're committed to renounce the requirements in raw material development in the production of sugar, milk, wood and vegetable oil," he said.

 

India now has 38 projects with a total registered capital of US$200 million, ranking 29th out of 89 countries and territories with investments in the country and employing around 5,000 people.

 

India's world-class industry powerhouses like Tata, Reliance, OMGC Videsh and Bank of India are new in the country, while its pharmaceuticals are well established in Vietnam.

 

Areas of Indian investment include oil and gas exploration, pharmaceuticals, sugar, steel, electricity, cashew processing, software development, furniture, leather, garments and textiles.

 

Investors saw the benefits of a "young labour force, stable political environment and plenty of sea ports along 3,200km of coastline," said Shri Somappa Karjigi, chief representative of Bank of India.

 

Manoj Gupta, senior factory manager of United Phosphorus Limited, said the main difficulty was that his company had to import most raw materials for their production from China.

 

Bilateral trade value has grown five times from US$500 million in 2003 to almost US$2.5 billion in 2008, making India the country's biggest South Asian trade partner, according to Ly Quoc Hung, head of the Ministry of Industry and Trade's Department for Southwest Asia and Africa.

 

However, disputes over farm subsidies nearly hijacked Indian-Asean free trade talks, said Lal Thal Muana, Indian Ambassador in Vietnam. "There are interest groups in India and Asean which are not ready to face competition," he added.