Vietnam: A Leading Dark Horse in the “India vs China” Export Race.

India’s biggest competitor in terms of Exports might not be China/Bangladesh, but aggressive hustler Vietnam (VNM). Vietnam is a very organized country. Talking of recent times, it has not even had one death due to Covid-19 since September, despite sharing a long land border with China. India’s population is ~13x than VNM and India’s GDP is ~10x of Vietnam’s GDP as of 2019-20.

• Exports over the past decade –

The year 2010
Vietnam: $72 Bn
India: $220 Bn.

The year 2019-20
Vnm : $318 Bn (Up ~4.4x)
Ind : $323 Bn (Up ~1.4x)

Today, India imports more than it exports – Trade Deficit (TD), VNM exports more than it imports – Trade Surplus (TS)

2010
Vnm: $13 Bn TD
Ind: $130 Bn TD

2019-20
Vnm : $47 Bn TS !!
Ind : $156 Bn TD

Vietnam climbed global ranks as a key electronics exporter, from 47th in 2001 to 12th spot in 2019!

Industrialization: Samsung’s largest factory outside its home country (South Korea) is in VNM. Recently, Foxconn said to move mfg of its iPads, MacBooks to VNM from China, investing $270 Mn.

Government structure:

VNM has one-party system, so not directly comparable to Indian democracy decision making, that comes with its own set of benefits.

Agriculture:

Coming to agriculture, VNM is the world’s largest exporter of cashew & black pepper and has allegedly been dumping huge volumes of black pepper in Indian markets causing a strain on domestic farmers and prices. Recently, the VNM export price of “rice” touched a record high bringing $2.6 Bn as revenue in 2020 so far. The same for India was around $6 Bn. Back home, Punjab’s granaries overflow with wheat and paddy from nearly 3 years’ seasons stock lying unconsumed, as India climbs spots on the world hunger index with 14% population undernourished & hungry.

Textiles:

While Bangladesh is the 2nd largest Textile exporter after China, Vietnam’s Textile Exports have grown 240% in the last 8 years. Picking one example from the “Ease of doing Biz” handbook – (Source: HLAG report 2019)

Average time to reach “port” docks from production facilities :
China, Bangladesh, Vietnam: ~1 day or less
India: Minimum 7-10 days.

Why so?
Due to Infra & transport, legal, knowledge gap, etc. Once ravaged by the wrath of war, Vietnam is bouncing back for a seat at the table with global powers – with aggressive policies, trade relations, and fierce execution.

With increasing focus on “cool” startup ventures and focused selling to the Indian middle-class consumer segment, do you think Indian entrepreneurs & policy makers are missing big bites of the global exports or traditional sector evolution pie?