[Updated] Modi Offers Vietnam Defense Credit Line

Modi and Phuc
Modi and Phuc

By MarEx 2016-09-04 18:42:48

Indian Prime Minister Narendra Modi said on Saturday his country would provide a credit line of $500 Million to Vietnam for defense cooperation, the latest sign of closer ties between two countries with separate territorial disputes with China.

The credit offered by Modi, the first Indian prime minister to visit Vietnam in 15 years, was among a dozen cooperation agreements he signed in Hanoi alongside Vietnamese counterpart Nguyen Xuan Phuc.

Vietnam is in the midst of a major military buildup that analysts say is a deterrent as neighboring China grows more assertive in staking its rival claims in the South China Sea.

“The links between our societies go back over 2,000 years,” said Modi. “For people of my generation, Vietnam holds a special place in our hearts. The bravery of the Vietnamese people in gaining independence from colonial rule has been a true inspiration. And, your success in national reunification and commitment to nation building reflects the strength of character of your people. We in India have admired your determination, rejoiced in your success and have been with you all along in your national journey.”

Modi says that as two important countries in this region, it necessary to further ties on regional and international issues of common concern. “The agreement on construction of offshore patrol boats signed earlier today is one of the steps to give concrete shape to our defense engagement.” 

India and its 1.25 billion people stand ready to be Vietnam's partner and friend, said Modi. “Enhancing bilateral commercial engagement is also our strategic objective. For this, new trade and business opportunities will be tapped to achieve the trade target of $15 billion dollars by 2020.” 

Modi, who was en-route to a G20 Summit in China, did not elaborate on what Vietnam would use the $500 million credit for.

The offer comes after a surge of almost 700 percent in Vietnam's defense procurements as of 2015, according to the Stockholm International Peace Research Institute think-tank, which tracks the arm trade over five-year periods.

Vietnam is in the midst of a quiet military buildup analysts say is designed as a deterrent, to secure its 200 nautical mile Exclusive Economic Zone as China grows more assertive in staking its claims in the South China Sea.

Experts say Vietnam is in the market for fighter jets and more advanced missile systems, in addition to its six kilo-class submarines it has bought from Russia, the last of which it will receive late this year.

The agreements signed on Saturday covered areas like health, cyber security, ship-building, U.N. peace-keeping operations and naval information sharing.