External Affairs

Modi to Visit Vietnam as India’s ‘Act East’ Policy Takes It to South China Sea

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With one eye on Beijing, enhanced economic and strategic ties are on the agenda but sale of the sea-launched Brahmos missile is not on the cards.

Prime Minister Nguyen Tan Dung of Vietnam at Bodhgaya in 2014. Credit: MEA

Prime Minister Nguyen Tan Dung of Vietnam at Bodhgaya in 2014. Credit: MEA

New Delhi: In a little over a month from now, Prime Minister Narendra Modi will visit Vietnam, signalling India’s interest in stronger ties with a key Southeast Asian partner at a time when the region is grappling with the fallout from Beijing’s reaction to the recent international tribunal decision on the South China Sea.

Modi is already scheduled to travel to two back-to-back multilateral summits which are being held in the region. On  September 4-5, he will be in Guangzhou, China to attend the G-20 leaders’ summit. A day later, the ASEAN summit will begin in Vientiane, Laos on September 6-7.

Though a formal announcement has not yet been made, South Block sources confirmed to The Wire that Vietnam has been included as a bilateral destination, taking advantage of Modi’s presence in the vicinity.

The visit assumes significance not just because it will be the first visit to Vietnam by an Indian prime minister for  standalone bilateral talks in 15 years, but also because Modi will be visiting the country in the aftermath of a key arbitral tribunal ruling that went against China’s claims in the South China Sea.

The dispute before the tribunal was between Philippines and China but the ruling has given a shot in the arm to other littoral states – especially Vietnam – which are locked in dispute with Beijing.

Diplomatic sources said that discussions were still going on between Hanoi and Delhi to firm up the deliverables which will be announced during Modi’s visit in order to take the strategic partnership to the next level. Upcoming foreign office consultations could finalise some of the agreements to be signed formally.

Rising defence ties but no Brahmos yet

The last major bilateral visits took place in September and October 2014 when, respectively, President Pranab Mukherjee went to Hanoi and the prime minister of Vietnam, Nguyen Tan Dung came to India. During Dung’s visit, both sides called for the early operationalisation of the $100 million line of credit for defence procurement. The amount is being utilised for the supply of patrol boats to augment Vietnam’s naval presence in its territorial waters.

In June 2016, defence minister Manohar Parrikar was in Vietnam during which the Vietnamese Border Guards handed over the bid document to Larsen and Toubro for purchase of fast interceptor craft for coastal and maritime security. The contract is likely to be signed during Modi’s visit.

Earlier, during the Vietnamese defence minister’s trip to India last year, a five-year joint vision statement for 2015-20 was signed.

Modi had told Prime Minister Dung in 2014 that India’s defence cooperation with Vietnam was “among our most important ones”. “India remains committed to the modernization of Vietnam’s defence and security forces,” he added. By the time that meeting took place, India was already training a couple of batches of Vietnamese naval personnel who were to operate six kilo-class submarines procured from the Russians – thereby enhancing Vietnam’s patrolling strength in the South China sea.

After India joined the Missile Technology Control Regime, there was some chatter about the export of the Brahmos missile to Vietnam. Though the official range of the Indo-Russian missile is below the MTCR’s permissible 300 km threshold, Indian officials say the sale of Brahmos is not on the cards primarily because Hanoi has not expressed an interest in its purchase.

While Brahmos is not on the table yet, India is certainly looking for suitable clients for “permissible missile systems”. According to the Stockholm International Peace Research Institute (SIPRI), Vietnam’s defence imports had increased 699% in the period 2011-2015, compared to the previous five-year period. This means that Vietnam was the 8th largest arms importers in the world in the last five years – a meteoric rise from its 43rd spot in the preceding period.

Vietnam has increasingly drawn closer to India, in tandem with China’s stepped up activities in the South China Sea since 2011. Vietnam and China have overlapping claims in the area, which include the Spratlys and Paracel island groups.

While Vietnam’s claims also overlap with other claimants like the Philippines, Beijing has been the main villain in  Vietnamese eyes. China’s expedited island building, clashes between Chinese naval vessels and Vietnamese fishing boats on the high seas, the auctioning of offshore blocks in disputed area and the setting up of an oil rig have all rubbed Hanoi the wrong way.

Vietnamese views of India

With a historical nationalist narrative shaped around animosity towards its giant northern neighbour, the only public demonstrations allowed in the streets of the smaller Communist state have been against China. As public anxieties in Vietnam about Chinese claims grow, Japan and India have risen high on the popularity graph.

In fact, the Pew Global attitudes survey 2015 found that two-thirds of Vietnamese, or 66% of the population, have a favourable view about India. This proportion increases to 72% among Vietnamese in the age bracket of 18 to 29 years. This is the highest favourability rate clocked by New Delhi in any Southeast Asian nation, against the average of 51% in the region. China finds favour only among 19% of the survey sample size of 1000 Vietnamese.

Further, as per this poll, 56% of Vietnamese had confidence that Prime Minister Modi “would do the right thing regarding world affairs” vis-à-vis only 20% having a similar belief in President Xi Jinping of China

At 82%, Japan and South Korea were jointly tied at top spot as the object of affection for the Vietnamese. Japanese prime minister Shinzo Abe, with a 68% favourable rating, also pipped Modi on the personality front. Japan has been the top  source of foreign aid for Vietnam in recent years, with both countries having a strategic convergence on their China policy.

The survey also found that a higher proportion of Vietnamese – 60% – were “very concerned” about territorial disputes with China, compared to 58% in the Philippines.

Not surprisingly, Vietnam has found itself being courted by countries with whom it shares similar concerns about the rise of China. During the visit of US president Barack Obama in May, the US removed a decade-old arms embargo which will allow Vietnam access to maritime surveillance and security equipment.

Despite popular sentiment, Vietnam has been careful to keep a lid on nationalist hawks after the July 12 decision of the South China Sea arbitral tribunal which unanimously ruled in favour of the Philippines. China, which declined to take part in the dispute resolution mechanism, has declared the tribunal award “null and void”.­

With the help of allies like Cambodia, China ensured that the first meeting of ASEAN foreign ministers following the tribunal ruling made no reference to the Hague order. This even though the Vietnamese foreign ministry had issued a strong statement that the South China Sea had become a “a test case for the unity and the central role of ASEAN“.

On its part, Vietnam had “welcomed­” the July 12 tribunal ruling, which declared that most of the land features in the Spratlys were not big enough to claim an exclusive economic zone and rejected China’s ‘nine-dash’ line as having no legal basis. Since September 2013, China has begun an extensive island building project in the Spratlys, expanding seven land features in the islands – one of which was big enough to land a military plane this April.

Indian oil exploration

India was drawn into the South China Sea dispute by Vietnam when it awarded two offshore blocks to state-run ONGC Videsh in 2006. One of these was relinquished, while ONGC Videsh hung onto block 128, even though there are no expectations of discovery. In 2012, China National Oil Offshore Company (Cnooc) invited global bidding for nine blocks, all of which fell in Vietnam’s EEZ. Out of them, two blocks, 152 and 153, drawn up by CNOOC overlapped over half of the territory of ONGC’s block 128.

Even though ONGC Videsh had expressed interest in withdrawing, Vietnam pressed upon India the necessity to keep a foot in the region, in spite of Chinese objections. Since then, ONGC Videsh has applied for and routinely got annual extensions to keep block 128.

In his 2014 book on the South China Sea, former journalist Bill Hayton wrote that it was oil which led South Vietnam to formally annexe 10 Spratlys islands in September 1973, in order to let western oil companies safely explore their offshore concessions. This position was inherited by the reunified Vietnamese government, which claimed sovereignty over the Spratlys.

Interestingly, a 1978 diplomatic cable released by Wikileaks indicates that India was already showing interest in Vietnam’s deep sea hydrocarbon resources four decades ago. “We have confirmed with a senior GOI official in the Ministry of Petroleum (of) India’s offer to assist the Vietnamese government in developing offshore oilfields,” said the diplomatic telegram from the US embassy in New Delhi. The offer was apparently an “informal one” made by petroleum minister K.D. Malaviya to the Vietnamese envoy.

However, the cable also quotes the unnamed official as saying that the proposal may not materialise “into anything concrete” as Hanoi had already “extended invitations to the multinational oil companies to return to Vietnam”.

It took another 10 years for India to enter Vietnam’s oil sector when it got block 6.1 off the southern coast, with 45% participating interest and the rest owned by two state Vietnamese oil firms. Production began in 2002, with ONGC’s share being 2.023 billion cubic metres of gas.

Now, the Indian presence is not about only having access to oil supplies, but to be a stakeholder in the region to keep open lanes through which 55% of India’s trade passes.

Indian view of the South China Sea dispute

India’s position on the South China Sea dispute has become more nuanced over the years, but it has always sought resolution as per international law and under the UN Convention on the Law of the Sea (UNCLOS), which is clearly in alignment with Vietnam and Philippines’s stance for a multilateral solution. The Chinese position has been to declare the dispute as a purely bilateral one.

Ahead of the arbitral tribunal’s ruling, Chinese official media had included India in the list of 60-70 countries which supported Beijing. China apparently extrapolated India’s position based on a single sentence in paragraph 21 of the April 18 joint communique issued by the foreign ministers of Russia, India and China, as per officials:

Russia, India and China are committed to maintaining a legal order for the seas and oceans based on the principles of international law, as reflected notably in the UN Convention on the Law of Sea (UNCLOS). All related disputes should be addressed through negotiations and agreements between the parties concerned. In this regard the ministers called for full respect of all provisions of UNCLOS, as well as the Declaration on the Conduct of Parties in the South China Sea (DOC) and the guidelines for the implementation of the DOC.

“The Chinese conveniently only read the middle line about negotiations ‘between the parties’, and just ignored the first and last sentences,” said a senior MEA official.

Even though the ruling came in the aftermath of China opposing India’s membership of NSG, the Indian statement did not increase the pitch on its traditional position on South China Sea. The statement merely “noted” the order, called for self-restraint and “utmost respect” for UNCLOS. But, it did not explicitly tell China to abide by the judgment.

Having finely navigated the balance post-Hague order, sources said that New Delhi was clearly interested in upping its engagement in Vietnam.

From space to textiles

Besides the defence relationship, another strategic project by India that could have implications for Vietnam’s ability to monitor developments in the South China Sea was establishment of a ISRO satellite tracking centre.

India had proposed this project for the establishment of a tracking, data reception station and data processing facility in Vietnam under ASEAN, and not in the bilateral context. A Reuters report in January claimed that the project will allow Vietnam to have access to satellite images of its volatile neighbourhood, which could have military purposes.

At the meeting of ASEAN-India foreign ministers in Laos last week (July 25), minister of state for external affairs V.K. Singh said that ISRO had already identified the site for the “seminal project”. “I request Vietnam to expedite allotment of land and provide other facilities at the selected site so that construction of the station can commence at the earliest,” he said.

When India first started to look seriously at Vietnam in the initial years of its Look East policy in early nineties, it was mainly through the economic prism, as the communist state – which had begun its version of perestroika, or Đổi Mới – was slowly beginning to open up to outside opportunities.

Currently, the bilateral trade volume stands at $8 billion, and Indian investment in Vietnam is worth over $1 billion. The official target is to reach $15 billion in four years.

Even in the economic sphere, Vietnam has been looking at India to supplant Chinese dominance of raw material supply for its booming textile industry. During his 2014 visit, Prime Minister Dong had pointedly noted that India had “agreed to assist Vietnam to diversify sources of input materials for Vietnamese industries, especially the textile and garment industries”.

At a business event last August, Vietnam’s ambassador said his country wants  “to reduce our heavy dependence from cotton and yarn supplies from China”.

Officials said that another theme of Modi’s visit to Vietnam will be to highlight common cultural threads, especially of Buddhism. Despite being a communist regime, all high-level visitors from Vietnam have always included a trip to Bodhgaya.

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    Visit of Indian PM to Vietnam would have significant impact on indo-china as well as indo- US relations. The forays into south China seas and improving ties with Vietnam increases the already brewing tensions. It is to be interesting to observe Chinese reaction when PM visits China for G20 summit.