Prime Minister Narendra Modi and his Vietnamese counterpart Nguyen Xuan Phuc (2nd L) feed fish in Hanoi. REUTERS

Ajay Banerjee

Tribune News Service

New Delhi, September 3

Prime Minister Narendra Modi’s announcement of a $500 million line of credit for ‘facilitating’ a deeper defence cooperation with Vietnam, is expected to open doors for a greater number of India-made warships and missiles to be supplied in what is China’s backyard.New Delhi with its $500-million offer has clearly landed in the next league to be counted as “friends of Vietnam” that is locked in a dispute with China over territorial rights in the hydrocarbon-rich South China Sea. The country uniquely enjoys a strategic relationship with the US, Japan and Russia. New Delhi’s “Act East Policy” clarifies that Japan, Vietnam and Australia are the pillars when it came to countering China.In October 2014, New Delhi ignored expected protests from Beijing and agreed to supply military equipment, naval ships and launch a space satellite for Vietnam along with a $100 million line of credit.So, a line of credit for Hanoi is not new, it’s the quantum jump in amount that will make Beijing take note. Since 1976, India has extended 17 lines of credit worth more than $165 million to Vietnam. India had in the past extended line of credit of $100 million for infrastructure and defence procurement, Modi has made it five times bigger. “I am also happy to announce a new defence credit for Vietnam of $500 million for facilitating deeper defence cooperation,” Modi told reporters in Hanoi.This falls in line with a five-year (2015-2020) joint vision statement between India and Vietnam on defence cooperation to build closer strategic ties. Earlier this year, the US lifted a 50-year-old arms embargo on Vietnam. Japan is Hanoi’s biggest bilateral donor, a large trading partner and the third largest foreign investor. Japan has provided six vessels to Vietnam to boost maritime security. Vietnam’s Air Force operates Russian-made SU-30MK2 fighter jets while its tanks, helicopters and kilo-class submarines are from Russia. India, which operates the same subs, trains the Vietnamese Navy in operating the vessels and also provides English language training for the armed forces of Vietnam.