Indian Prime Minister Narendra Modi offered Vietnam a credit line on Saturday of half a billion dollars for defense cooperation, giving a lift to a country rapidly pursing a military deterrent as discord festers China and it’s territory grabs in the South China Sea.
India and Vietnam share borders and large trade volumes with China and have repeatedly locked horns with Beijing, over the territorial disputes in the Himalayas and the South China Sea, respectively.
Both are also beefing-up of their defenses and in India’s case, its defense industry, promoting heavily its supersonic BrahMos missile. India is keen to sell the missile to Vietnam and four other countries, according to a government note seen by Reuters in June.
In an address to media, Modi said the credit was for “facilitating mutual defense cooperation” and the relationship between the two countries would “contribute to stability, securities and prosperity in this region”.
Modi, who was en-route to a G20 Summit in China, made no mention of the patrol vessels, nor BrahMos missiles, and did not elaborate on what Vietnam would use the $500 million credit for.
The offer comes after a surge of almost 700 percent in Vietnam’s defense procurements as of 2015, according to the Stockholm International Peace Research Institute think-tank, which tracks the arm trade over five-year periods.
Vietnam is in the midst of a quiet military buildup analysts say is designed as a deterrent, to secure its 200 nautical mile Exclusive Economic Zone as China grows more assertive in staking its claims in the South China Sea.
Experts say Vietnam is in the market for fighter jets and more advanced missile systems, in addition to its six kilo-class submarines it has bought from Russia, the last of which it will receive late this year.