India and Vietnam signed several deals to strengthen economic and defense ties Oct. 28 during Vietnamese Prime Minister Nguyen Tan Dung’s two-day visit. Closer cooperation between New Delhi and Hanoi could cause concern for Beijing; India has been gaining influence in the South China Sea to counter China’s growing presence in the Indian Ocean, and Vietnam has been looking for help in its increasingly acrimonious territorial dispute with China in the South China Sea. However, India and Vietnam have other economic, political and military reasons to seek a closer relationship.
China’s naval forays into the Indian Ocean have increased, as has Beijing’s cooperation with regional countries such as Bangladesh, Sri Lanka and the Maldives. China’s moves in India’s neighborhood concern New Delhi, which is responding with its own efforts to increase its influence in the South China Sea region. Vietnam, meanwhile, has been looking for third-party involvement to help it secure its interests in the region, particularly amid its territorial dispute with Beijing in the South China Sea. Hanoi has made political progress with several other countries, including the United States, but Vietnam remains particularly close with Russia (its main weapons exporter) and India.
However, stronger bilateral relations between India and Vietnam are not only about countering China. Vietnam continues to have a tight economic and even political relationship with China, and a substantial number of Vietnamese political elites seek closer ties with Beijing. The newly announced deals between Hanoi and New Delhi, though substantial in their own right, do not alter this situation and do not yet affect the balance of power in the South China Sea.
As part of its Look East policy, India has attempted to court members of the Association of Southeast Asian Nations, but its efforts have stalled during the past decade. However, Indian Prime Minister Narendra Modi has recently sought to not only Look East but also to Act East. Vietnam’s increasing defense needs, as well as its desire for collaboration in energy exploration, have opened the door for much closer relations with India. As part of their stronger relationship, the two nations engaged in joint oil exploration efforts in disputed areas of South China Sea. However, the efforts failed because of a lack of commercial viability and opposition from China.
Given that Vietnam and India use many of the same weapons systems purchased from Russia, there is considerable space for the two to cooperate in training, joint exercises and even defense industry collaboration. In the deals signed Oct. 28, India pledged to enhance its training of Vietnamese sailors and pilots on the Kilo-class submarines and Su-30 fighter aircraft that both countries use. Additionally, the deals made a $100 million line of credit available to Vietnam that will enable Hanoi to acquire new patrol vessels from India. India has also pushed for Vietnam’s inclusion in the development and fielding of the advanced BrahMos cruise missile that India and Russia are developing jointly.
On the energy front, India agreed to civil nuclear cooperation with Vietnam and secured further oil exploration rights from Hanoi. The two exploration blocks secured by India are located largely in the Gulf of Tonkin. However, a small portion could cross a disputed line in proximity to the Paracel Islands, which are in the center of Vietnam’s territorial dispute with China.
The deals signed Oct. 28 undoubtedly improve relations between India and Vietnam. Given the scope of these deals, especially in light of Vietnam’s continued diplomatic maneuvering with Beijing, China is unlikely to react strongly to the increased cooperation between Hanoi and New Delhi. However, Beijing will continue monitoring the relationship closely while enhancing its own ties in the Indian Ocean basin.
© 2014, STRATFOR GLOBAL INTELLIGENCE
Publishing by The Manila Times of this analysis is with express permission of Stratfor.