Vietnam 'bright spot' in India's investment strategy

Indian businesses interested in Vietnam's investment environment

The International Investment Promotion Alliance (Invest Global) has just signed a Memorandum of Understanding with the Research and Promotion Support Unit (MARS) of India, aiming to promote trade connections, expand investment cooperation opportunities and support businesses of the two countries to effectively exploit available potential in areas of strength for both sides. On this occasion, a reporter from the Industry and Trade Newspaper had an interview with Dr. Bui Trong Thoan - Deputy General Director of Invest Global about the prospects of attracting FDI from India in the coming time.

- How do you evaluate the prospects of attracting investment in Vietnam from Indian corporations and businesses at present?

Dr. Bui Trong Thoan: In April 2025, a delegation of 40 Indian businesses operating in many fields came to Vietnam to seek investment and business opportunities. Of these, 25 businesses came to Hanoi to attend the "India - Vietnam Multi-Industry Business Exchange Forum". These businesses are all very interested in the investment and business environment in Vietnam.

Mr. Bui Trong Thoan – Deputy General Director of the International Investment Promotion Alliance (Invest Global). Photo: Nguyen Hoa

Previously, I have advised many Indian businesses planning to invest in Vietnam. In general, businesses highly appreciate the investment environment in Vietnam. Vietnam is also a potential investment market thanks to its advantages in geographical location, political stability, impressive economic growth, etc.

In particular, Vietnam has a great advantage when participating in up to 17 Free Trade Agreements (FTAs), including new generation FTAs ​​such as the Vietnam - European Union Free Trade Agreement (EVFTA); Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP); Regional Comprehensive Economic Partnership (RCEP) ... with these FTAs, Vietnam has a great opportunity to export goods to markets around the world. That is the reason why many foreign enterprises in general and Indian enterprises in particular have chosen Vietnam to invest and seek export opportunities to major markets around the world.

Vietnam and India have also upgraded their bilateral relations to a Comprehensive Strategic Partnership, which has opened up huge opportunities to promote trade and investment for the economy in general and businesses in particular. Vietnam is also an investment market that the Indian Government is interested in and encourages. Accordingly, the prospect of attracting FDI from India to Vietnam is very positive.

Indian business delegation explores investment environment in Dong Thap province. Photo: Huu Tuan

More policies to attract FDI from India

- So what are the areas that Indian businesses are interested in when investing in Vietnam, sir?

Dr. Bui Trong Thoan : It can be said that many fields in Vietnam receive the attention of Indian enterprises, including fields such as textiles, energy, industry, infrastructure construction, especially seaports... these are also fields in which Indian enterprises have great advantages.

In addition to the above fields, many Indian enterprises coming to Vietnam also have the need to learn about importing Vietnamese agricultural products, especially products derived from cereals for distribution in the Indian market. This is a large market with a population of up to 1.4 billion people, so the demand for importing products produced in Vietnam is also very large. If this market can meet the needs, it will open up very good cooperation opportunities for Vietnamese enterprises and the Vietnamese economy.

- Although highly appreciating Vietnam's investment environment, FDI from India to Vietnam has only reached over 1 billion USD, ranking 25th out of 150 countries and territories investing in Vietnam. In your opinion, to increase investment attraction from India, what solutions does Vietnam need?

Dr. Bui Trong Thoan : As of May 2025, Vietnam has only attracted 441 direct investment projects from Indian enterprises, with a total registered capital of more than 1 billion USD. If compared to the total accumulated FDI capital into Vietnam to date, which has reached over 500 billion USD, the FDI capital flow from India to Vietnam is very modest, not commensurate with the potential and relations between the two countries.

In fact, in the process of studying the environment and implementing investment projects in Vietnam, Indian enterprises also encountered some procedural difficulties, affecting their investment decisions. In addition, land rental prices in industrial zones in some major provinces and cities of Vietnam are currently quite high, and labor costs in Vietnam are also higher than in India. There have also been enterprises that, in the process of studying the investment environment, had to consider these factors to reduce costs.

However, to increase FDI attraction from India to Vietnam, in my opinion, the most important issue is still to improve the investment and business environment, in the direction of openness, transparency, and convenience for businesses in the process of implementing projects in Vietnam. Along with that, it is necessary to continue to improve infrastructure, especially transport infrastructure, to facilitate businesses in the process of traveling and transporting goods.

Finally, Vietnam needs to have a policy to support the development of supporting industries, so that FDI enterprises investing in Vietnam can increase the localization rate instead of depending on the import market, this will help enterprises reduce costs in terms of time and money when implementing projects in Vietnam.

Thank you!

By the end of April 2025, Vietnam had attracted 43,020 FDI projects from 150 countries and territories around the world, with a total registered capital of 513.8 billion USD. Of which, Indian enterprises have invested in 441 projects in Vietnam, with a total registered capital of more than 1 billion USD, ranking 25th out of 150 countries and territories investing in Vietnam.

Nguyen Hoa (performed)

Source: https://congthuong.vn/viet-nam-diem-sang-trong-chien-luoc-dau-tu-cua-an-do-387574.html