India enhances presence in South China Sea

Notwithstanding Chinese objections, India on Tuesday went ahead to enhance its presence in hydrocarbon-rich South China Sea and inked a pact with Vietnam for exploration in two additional oil and gas blocks besides deciding to step up cooperation in key areas of defence, security, trade and counter-terrorism.

Prime Minister Narendra Modi and his Vietnamese counterpart Nguyen Tan Dung held wide-ranging talks on important bilateral, regional issues and pitched for "freedom of navigation and commerce, and peaceful settlement of maritime disputes in the region". The two sides also signed an agreement on extension of the contract for another oil project in South China Sea. With acceptance of two additional blocks, India has exploration projects in five Vietnamese blocks.

The agreement between OVL and PetroVietnam aims to enhance mutual cooperation between India and Vietnam in hydrocarbon sector and underlines Vietnamese invitation to OVL to expand its presence in Vietnam and further consolidate cooperation in exploration and other areas between the two countries in energy sector. Noting that India-Vietnam partnership was essential for advancing peace and stability in the shared neighbourhood, Modi, at a joint media event with Tan, said, "We have shared interest in maritime security, including freedom of navigation and commerce and peaceful settlement of maritime disputes in accordance with international law."

Tuesday's agreements on oil exploration are likely to irk China, which has an acrimonious relationship with Vietnam due to their standoff over the South China Sea, a major source of hydrocarbons. China has been objecting to India's oil exploration projects in the disputed waters.

"Today, our partnership is important for promoting our nations' prosperity and essential for advancing peace and stability in our shared neighbourhood. We have shared interest in maritime security, including freedom of navigation and commerce and peaceful settlement of maritime disputes in accordance with international law," Modi said.

Both the sides noted that freedom of navigation and overflight in the South China Sea should not be impeded and called the parties concerned to exercise restraint, avoid threat or use of force and resolve disputes through peaceful means in accordance with universally recognised principles of international law, including the UNCLOS-1982. They also welcomed the collective commitment of the parties concerned to abide by and implement the 2002 Declaration on the Conduct of Parties in the South China Sea and to work towards the adoption of a Code of Conduct in the South China Sea on the basis of consensus.
Modi and Tan also favoured cooperation in ensuring security of sea-lanes, maritime safety and security, combating piracy and conducting search and rescue operations.

Tan welcomed Indian oil and gas companies to explore new opportunities in midstream and downstream activities in the oil and gas sector in Vietnam. "Vietnam highly appreciates India's position regarding East Sea and India's continued cooperation in the Vietnam in oil and gas exploration in our exclusive economic zone." Modi thanked Tan for Vietnam's commitment to collaboration with India in its oil and gas sector and its additional offer of exploration blocks. "We will continue to deepen our cooperation in this sector and associated downstream industry."

He said both the countries have also agreed to increase cooperation in space, including in space applications and launch of Vietnam's satellites, and in peaceful uses of civil nuclear energy. Apart from agreements in oil and gas exploration, the two countries also signed five more pacts providing for cooperation in sectors like education, culture and broadcasting, conservation and restoration of the world heritage site of My Son in Vietnam's Quang Nam Province and the Nalanda university project.

Talking about defence cooperation, Modi said India's defence cooperation with Vietnam is among its "most important ones" and that it remained committed to the modernisation of Vietnam's defence and security forces. "This will include expansion of our training programme, which is already very substantial, joint exercises and cooperation in defence equipment," he said. The Vietnamese side was conveyed about Tata Group seeking expeditious clearances for its thermal power project in the country as it wants to complete the project by 2020. In the meeting, the Vietnamese side also sought India's help in providing IT skills to its people by way of more slots for students in India educational institutions or setting up of a university in Vietnam. 

India also offered Vietnam slots in the Petroleum university for better management of their oil and gas exploration projects. Favouring expansion of ties in diverse areas, Modi also talked about possible cooperation in herbal medicine. "We emphasised the need for stronger economic relationship as an essential component of a strong strategic partnership. We see great opportunities for increased trade and enhanced Indian participation in areas such energy, infrastructure, textiles, chemicals, machinery, agro-processing and information technology in Vietnam," he said.

He said Vietnam's recent decisions on infrastructure projects for Indian companies, the award of a banking licence to Bank of India and direct air links through Jet Airways and Vietnam Airlines reflect the new momentum in the economic relations. "I have thanked Prime Minister Dung for Vietnam's co-sponsorship of the resolution in the UN General Assembly to declare June 21 as the International Yoga Day," Modi said.

Tan said he has invited Modi to visit Vietnam which he accepted. "Modi reaffirmed that Vietnam was an important pillar of India's Look East Policy. Prime Minister Dung welcomed a greater role for India in the regional and international arena," said the joint statement. It said the Prime Ministers expressed satisfaction at the progress made in defence cooperation including exchange of visits, annual security dialogue, service to service cooperation, ship visits, training and capacity building.

The two Prime Ministers agreed that enhancing economic cooperation between both countries should be pursued as a strategic objective. They welcomed the strong growth in bilateral trade in recent years particularly after the implementation of India-ASEAN Trade in Goods Agreement and noted that the conclusion of India-ASEAN Trade in Services and Investment Agreements would further boost economic cooperation between India and ASEAN in general and Vietnam in particular.

They agreed to take measures to significantly expand and diversify bilateral trade for mutually beneficial results and agreed to enhance the trade targets to USD 15 billion by 2020. Tan welcomed Indian companies to invest in Vietnam and affirmed Vietnam's commitment to create favourable conditions for Indian investments. Modi invited Vietnamese companies to join the accelerated economic growth programme 'Make in India' for reaping the benefits of this new initiative. They agreed to utilise the Customs Cooperation Agreement and Maritime Shipping Agreement between the two countries for facilitating more intensive economic engagement.