What should be India’s focus: victory or improvement?


In the light of increasing border conflicts with China, India has also responded by banning significant Chinese owned or funded apps from its Indian user base, to stop their access to 1.3 billion potential users. While this approach is up for debate in the major economic and socially educated groups, there is no denial of the fact that India needs to do more to send out a message to China. The China-Vietnam conflict is also a premiere example from which India can learn to retaliate while profiting from it.

The Doi Moi reform process

Vietnam started the Doi Moi reform process to rejuvenate all its trade policies and economic activities in 1986. This came much later than China, who was already working on it since the late 1970s and before India (who began in 1991).

Today, the Doi Moi reform process’s success can be measured by seeing its economic impact on Vietnam. They export more garments to the United States, along with Bangladesh and China, than India. Now, Vietnam is also set to woo the global electronics and mobile phone companies trying to move out of China, after the outspread of COVID-19.

Vietnam’s merchandise export rate increased at an annual rate of 18% in the last decade, while India recorded 5% growth. Simultaneously, Vietnam also gained a trade surplus of $47 billion, over $13 billion of the previous decade. India had a trade deficit of $130 billion in 2010, which increased to $156 billion only in 2019. As of 2019, Vietnam exports electric machinery and equipment as 41% of its total export market. The highest exports were recorded for mobile phones with 40% export to the US, the UAE, and Austria. On the other hand, India mostly exports low-tech manufacturing products like mineral fuels, pearls, vehicles, and organic chemicals.

The future is technology

Vietnam has been quick to realize the importance of hi-tech exports amounting to 40%, whereas India’s share stands at 9%. Samsung, a South-Korean tech giant, has one of its most extensive facilities in Vietnam, apart from its home country. Samsung also assembles half its global handsets in Vietnam ever since the US-China trade war. In 2018, Samsung traded for $67 billion with Vietnam, which is almost 28% of the country’s GDP. The European producers are also rushing to Vietnam to expand their Asia Pacific markets. Notably, most of these European producers have shifted from India to Vietnam, leading to a 4.4 times increase in Vietnam’s trade with the EU.

The way forward for India