DEFENSE EQUIPMENT- NAVY VESSEL

TO VIETNAM BY INDIA

WHY VIETNAM

• Political relations between India and Vietnam have always been strong

and "cloudless".

• Strengthening economic engagement, connectivity and people-to-

people exchanges

• Vietnam’s intention to build more economic and commercial bridges

with India

• Reduce Vietnam’s economic dependence on China.

• Modernization of its navy to fight with China.

• Both India and Vietnam have territorial disputes with China

PRODUCTS TO BE SOLD

• India would like to sell naval vessels to Vietnam to strengthen their

military force

• India with the help of Russia has started to produce best of the

warships and recently it also gave away its Brahmos to Vietnam

• These vessels are capable of ocean surveillance and monitoring and

can maintain control of shipping lanes.

• They can also be deployed to provide security to offshore oil

installations, and other naval assets

IMPACT OF POLITICAL-LEGAL

ENVIRONMENT

•In 2007, INDIA-VIETNAM came to a strategic partnership through

closer cooperation

• political, defense and security cooperation; (2) economic

cooperation; (3) science and technology cooperation; (4) cultural and

technical cooperation; and (5) multilateral and regional cooperation

• The trade between India and Vietnam (US $ 1.2 billion) is much

more than that with its immediate neighborhood.

• Common enemy-China

• Vietnam has supported India's bid to become a permanent member of

the U.N. Security Council

• Business partnerships and joint ventures to grow in the area of

infrastructure, agro-processing, textiles, agro-chemicals,

manufacturing, hydrocarbons, energy and many others

• Vietnam’s own desire to diversify its foreign relationships with India

and India's intention to build up its Look East Policy building long-

term strategic engagement in trade and military - Vietnam is

emerging as one of the key pillars.

• In 2010, ASEAN Free Trade Agreement in place, both nations seem

to be on track to realizing the 2011 pledge to boost bi-lateral trade to

$7 billion by 2015.

• US$3.917 billion by the end of 2012, with Vietnam exporting $1.7

billion to India in 2012, an increase of 56.5% from 2011.

• Free trade agreement

Import duties on the products listed in the ‘tariff liberalization schedule’

of each member shall be eliminated by 2015

•With the India - ASEAN Free Trade Agreement in place, both nations

seem to be on track to realizing the 2011 pledge to boost bi-lateral trade

to $7 billion by 2015.

• Modi and Dung also signed the first significant military sales deal

between the two nations, with India selling new naval vessels to

Vietnam, using a $100 million credit line for defense purchases.

• Two (MoU) with a business value of $500 million were signed for

investment in mining, oil fields, power sector and fund management.

• Boosting tourism for both countries

SOUTH CHINA SEA CASE IMPACT ON INDO-

VIETNAM RELATION

• The freedom of navigation in the air and water of the South China

Sea because it is a crucial economic passage and trade route for all of

Asia.

• Support to Vietnam and India

• India will develop a naval presence in the South China Sea through

access to the naval and air base and that India provide training and

advanced weapons to Vietnam so that Indian could have greater

control over China

• Vietnamese government invitation to India to carry out oil

exploration in South China Sea.

TRADE BARRIERS

• Tariffs and duty rates are constantly revised and are subject to change

without notice.

• Intellectual property rights (IPR) infringements are pervasive in

Vietnam

• It is ranked in 169th place by the World Bank and IFC, with a weak

director liability index and shareholder suits index

• All land in Vietnam is owned and managed by the state and, as such,

neither foreigners nor Vietnamese nationals can own land.

• Electronic commerce remains underdeveloped in Vietnam

REASONS FOR THESE TRADE BARRIERS :

• Competition among government agencies for control over business and

investments has created confusing and overlapping jurisdictions and

overly bureaucratic procedures that in turn create opportunities for

corruption. Inadequate accountability systems contribute to these

problems.

• Country has struggled to attract more investment in the absence of a

transparent legal and regulatory system.

The mode of entry that we chose is through exporting.

India with the help of Russia has started to produce best of the

warships

Need not setup manufacturing units

No problem regarding the rules and regulations in Vietnam

The export will spread Indian footprints across the region.

Urgent need of modernizing Vietnamese NAVY

MARKETING RESEARCH

• Looking at the Vietnam's relations with neighbours

• Need and Demand of the warships

• Availability of warships from other countries

• Mode of selling

• Relations with Vietnam and future of this relationship on both the

countries

• Benefit after selling warships that India and Vietnam will gain

• Homeland security for Vietnam-illicit drug and people trafficking as well as smuggling

• India's presences in South China Sea

• Better relations with Russia

• Revenues from Investment in other sectors like infrastructure, agro-processing, textiles, agro-chemicals, manufacturing, hydrocarbons, energy, defence , etc.

• Impact of India's relations with other countries

• Vietnam’s defense expenditure expected to increase at a CAGR of 14.32% during the forecast period

• The country’s homeland security spending is expected to increase at a CAGR of 12.90% during the forecast period.

• Vietnam prefers government to government deals in procuring defense systems

• Lack of private participants and a lack of transparency restrict domestic defense industry growth

Cambodia and Thailand

Laos

China

Peaceful countries

Thailand & Cambodia but a MOU was signed between both

countries in 2001 to settle the maritime dispute.

No opportunity to sell warships to both the countries but a

opportunity may arise in future if political tension rise again.

Royal Thai Navy’s is very strong and have following

equipments

Landlocked country

Small Land-locked country between Vietnam, Cambodia, Thailand and China,

Laos is the smallest economy in Southeast Asia. Its small population and its geography make Laos

Dependent on regional partners for economic development, the giant to the north is a good bet as a partner.

Significant corruption exists in the Lao government, military, and communist party

Lao People's Navy operates vessels on the Mekong River makes up a considerable portion of the Lao border

Influence of big China and dependence of Laos on china The two countries have witnessed growing friendly contacts and cooperation in the political, economic, military, cultural and health fields, and maintained close coordination and cooperation in international and regional affairs

Economic and Trade Relations between the two countries Cooperation in trade, investment protection, tourism and

automobile transport and technological cooperation

Border Issue Joint boundary of 500 kilometers long a peaceful, friendly and stable border.

Technologically advanced facility to fulfill its own demand

and is exporting to many countries.

Efficient Chinese military shipyards near Shanghai are

surpassing Western European, Japanese, and Korean military

shipbuilders

China’s military shipbuilding technical capabilities can likely

become as good as Russia’s are now by 2020 and will near

current U.S. shipbuilding technical proficiency levels by 2030.

China is now mass producing at least six classes of modern diesel-electric submarines and surface warships.

China is now number three globally and is rapidly gaining on Russia, the number two country.

Also the lower labor cost in China likely serves as a core driver.

THANK YOU