14:29 | 12/10/2015 Economy
(VEN) - Vietnam has signed a number of trade agreements and become the destination for many multinational industrial groups. With some trade agreements likely to be concluded in the near future, Vietnam has become very attractive to foreign investors interested in support industries, including Indian businesses.
48 Indian engineering businesses recently came to Vietnam to seek partners and investment opportunities through their participation in Vietnam Manufacturing Expo 2015. Indian Ambassador to Vietnam Shrimati Preeti said, “Vietnam has successfully attracted multinational groups to establish production facilities in the country in a variety of fields, including high technology. We hope Indian engineering businesses will become part of value chains and meet the needs of industries in Vietnam.”
According to Hanoi Supporting Industries Business Association (HANSIBA) Chairman Nguyen Hoang, Vietnam has to spend tens of billions of US dollars annually to import machinery for supply to large assemblers. “Meanwhile, Vietnamese businesses remain unable to manufacture these products. HANSIBA currently has about 200 member companies but they are unable to manufacture high-tech products,” he said. Therefore, Vietnamese companies very much want to cooperate with Indian engineering businesses.
Vietnam Chamber of Commerce and Industry (VCCI) Vice President Doan Duy Khuong said Vietnam currently had very high demand for support industry-related products. Free trade agreements will offer Vietnam-originated industrial products many preferences when entering global markets. Notably, when the ASEAN Economic Community is formed later this year, Indian engineering companies will supply their products for not only the Vietnamese market with 90 million consumers but also the entire ASEAN market of 600 million consumers.
Some large Indian industrial groups such as Inforsys, NIIT, Tata, Relience, Essar, and ONGC have invested in Vietnam. With its firm position in the map of global manufacturing, Vietnam is becoming more attractive to Indian businesses.
According to Nguyen Hoang, the Vietnamese government wants foreign direct investment (FDI) firms to invest or cooperate with Vietnamese businesses to manufacture components for supply to the domestic market. To attract FDI in this field, the government has put in place policies that offer foreign investors the best preferences while encouraging the establishment of specialized industrial parks with specific mechanisms to promote support industries.
For example, Hoang said, the N&G Development and Investment Corporation has invested in building the South Hanoi Supporting Industrial Park (HANSSIP) on an area of 600ha with a vision for its expansion to 2,000ha in the future. HANSSIP offers investors preferences in terms of corporate income tax, personal income tax, and local and national preferences. Hoang told 48 Indian businesses that HANSIBA was willing to develop an exclusive production complex on an area of 100-200ha for Indian businesses that want to invest in Vietnam in manufacturing engineering and other support industries.