Despite China’s objections to Indian investment in Vietnam’s oil and gas sector, India and Vietnam are looking to scale up energy ties, while also strengthening defence and security cooperation. Ahead of PM Narendra Modi’s virtual meeting with his counterpart Nguyen Xuan Phuc next week, Vietnam has said it’s looking forward to oil and gas exploration company Essar Exploration ramping up its investment in the southeast Asian country to $11 billion. The summit next week, in a sign of deepening defence ties, is also likely to coincide with the launch of the first high-speed patrol boat which L&T has built for Vietnam using the $100 million defence line of credit India announced earlier for the ASEAN country that remains locked in a territorial dispute with Beijing in South China Sea.
“Essar has expressed interest in scaling up their investment project in Vietnam to $11 billion. If that happens, the project will be the single biggest investment by an Indian company in Vietnam. We are looking forward to their decision and are very optimistic about it,” said Vietnam ambassador to India Pham Sanh Chau. Essar and ONGC Videsh are the two major oil companies active in Vietnam at the moment. Claiming sovereignty over almost the entire SCS with its controversial 9-dash claim line, China has repeatedly in the past expressed reservations about Vietnam’s invitation to Indian companies for offshore oil exploration, saying that development of bilateral relations should not be used as an excuse to infringe upon China’s “legitimate rights and interests” in the SCS. Both India and Vietnam look at defence and security ties as one of the main pillars of their comprehensive strategic partnership.