Bilateral trade between Viet Nam and South Asian countries reached US$1.265 billion in the first three months of the year, a year-on-year increase of 64.7 per cent, the Ministry of Industry and Trade (MoIT) has reported.

Viet Nam’s export revenue grew a whopping 148.5 per cent to hit $512 million and its imports made a 34 per cent gain to reach $753 million.

According to MoIT, Viet Nam’s export revenues to India amounted to a majority of $292.5 million or 57.1 per cent of the total export revenue, a year-on-year increase of 88.2 per cent. Bangladesh saw the highest growth of 588.6 per cent with a total export turnover of $174.9 million.

The Pakistan and Sri Lanka markets reached $32.5 million and $10.5 million with increases of 92.3 per cent and 32.9 per cent, respectively.

The high growth was attributed to the markets’ huge demand for agricultural products, food, materials for construction, textile and garments and processing industries. Successful trade promotion in the market was also a significant factor, along with the implementation of the Free Trade Agreement (FTA) between ASEAN countries and India that became effective in June last year.

The increasing prices of products manufactured by foreign invested enterprises investing in Viet Nam also helped boost export turnover. Those products included cellular phones and accessories, plastic material, chemicals, machinery, auto parts and steel.

During the first quarter of 2011, several export commodities hit high revenues such as rice, clinker, pharmaceutical goods, motorbike parts and bottled water. Bangladesh has been identified as a potential importer of rice and clinker while India is in need of textile, garment and footwear materials, cinnamon, steel products and motorbike parts.
Regarding imports, Viet Nam imported $708 million worth of goods from India amounting to 94 per cent of the total import revenues, followed by Pakistan at $28.6 million and Bangladesh at $11.6 million.

Viet Nam imported from India mostly animal food materials, $255 million; corn, $87 million; cotton, $62 million; pharmaceutical products, $57 million; machinery-chemicals-pesticides and other materials for the textile and garment, footwear, plastics and pharmaceutical industries.

The majority of imported commodities from South Asian countries was used for production, processing and domestic consumption. The cost and quality of those imported products were very competitive in comparison with other markets, MoIT said.
The ministry also said that the faster pace of exports in comparison to imports in the first three months helped lower Viet Nam’s trade deficit to $241 million from $356 million in the same period last year.

However, the country’s effort to balance trade was still challenging, particularly because India also enjoyed tariff cuts under the ASEAN – India FTA, MoIT added. — VNS