The Trans-Pacific Partnership (TPP) trade agreement, of which Vietnam is a member, is expected to reach its conclusion later this year. And with its signing, the Southeast Asian country is emerging as the hot destination for Indian investments. The TPP is a proposed regional free trade agreement aimed at eliminating tariffs and lowering non-tariff barriers that is being negotiated by 12 countries throughout the Asia-Pacific region, which collectively contribute almost half of global output and over 40 per cent of world trade. The 12 countries include Australia, Brunei, Canada, Chile, Japan, Malaysia, Mexico, New Zealand, Peru, Singapore, the United States and Vietnam.
India is eyeing an opportunity to invest in creating a manufacturing base in Vietnam for export to the other TPP member countries to enjoy the free trade access. The Indian government last week launched a preferential credit package worth $300 million for investments in the garment and textile sector of Vietnam over 10 years, according to the Vietnam Textile and Apparel Association (VITAS). India would be supporting investment projects in the garment and textile sector using Indian-made equipment and service up to 75 per cent of the total funding estimated for a single project. The entire credit package, with an interest rate of two per cent per annum for a 10-year term, is conducted through Vietnamese Eximbank under the guarantee of the Ministry of Finance, the VITAS said.
The package will help Indian businesses develop new factories in Vietnam, as well as promote cooperation between Vietnamese and Indian partners in the same field. This is also an opportunity for businesses to gain more advantages after Vietnam joins the TPP trade pact, the VITAS said, citing a document from the Indian government.
