In a first, India has offered a $ 100-million credit line to Vietnam to purchase military equipment. It will be used for purchasing four patrol boats.

The credit line was agreed upon around the time India once again expressed its resolve to remain involved in oil exploration activity in the Phu Kanh basin of the South China Sea. Vietnam says it is within its rights to invite India to explore for oil in this area. But China claims that this basin is within the “nine dotted line” or its zone of influence. The credit line is likely to be finalised by the time the General Secretary of the Communist Party of Vietnam visits India towards the end of the year.

Vietnam and India have long enjoyed strategic ties that include cooperation in the civil nuclear sector, training slots for Vietnamese military officers and frequent exchange of visits.

But this is one rare occasion when India is offering a defence-related credit line so far upfield. Usually, near neighbours squarely in India’s zone of direct influence have been the beneficiaries of New Delhi’s credit lines for the defence sector. For example, Mauritius, whose air force and navy have Indian defence hardware, was given credit lines to buy Indian patrol boats and Dhruv helicopters.

India has wanted to expand its defence ties with Vietnam to military hardware and one of the top- most items on the Vietnamese wish-list is the Brahmos missile, jointly produced with Russia, which, however, has close ties with both Vietnam and China and would not want to antagonise either.

Sources in the government wanted the credit line to be seen from the context of the overall drive to improve ties with South East Asian nations of which Vietnam’s close ties with India predate the Cold War. There has been a heavy traffic of high level visitors between the two countries that has led to a $ 45-million credit line for a 200-MW hydel project built by BHEL, offer of export of the Param supercomputer and a breakthrough for the Indian corporate sector though its Vietnamese counterparts have struggled.

The sources pointed out that India was beefing up security ties with all countries beyond its eastern flank as one of the vital components of its Look East policy. India and navies of some South East Asian countries have for long conducted the Milan series of naval exercises. The Indian Navy also conducts coordinated patrols with Thailand and holds joint exercises with Singapore and Japan.