VIETNAMESE PM LEADS LARGE TRADE DELEGATION TO KOLKATA

UNCLAS SECTION 01 OF 02 KOLKATA 000197 SIPDIS SENSITIVE SIPDIS E.O. 12958: N/A TAGS: ECON PREL EINV ETRD EMIN IN VM SUBJECT: VIETNAMESE PM LEADS LARGE TRADE DELEGATION TO KOLKATA REF: NEW DELHI 3070 ¶1. (SBU) Summary: On July 4, Vietnamese Prime Minister Nguyen Tan Dung arrived in Kolkata with a 172 member delegation to renew, what he describe as "an old and good friendship" with the Communist Party of India-Marxist (CPM)-ruled state of West Bengal and to strengthen economic relations. Dung's starting of his three-day visit to India in Kolkata was highly symbolic, providing an interesting mix of communist nostalgia and capitalist opportunism. Dung had discussions with West Bengal Chief Minister Buddhadeb Bhattacharya, attended a meeting hosted by the Indo-Vietnam Solidarity Committee, addressed the Indo-Vietnam Business Forum meet organized by Confederation of Indian Industries (CII),witnessed the signing of an investment deal and also visited the Tata Steel plant in Jamshedpur in neighboring Jharkhand state, later leaving for Mumbai on the same day. Reminisces aside, the visit by the Dung reflected how far the WB and Vietnamese Communists have changed their vision from the struggle for the masses to the struggle for investment. End Summary. ¶2. (U) The Vietnamese Prime Minister comes on the 35th year of the establishment of full diplomatic relations between India and Vietnam. During his visit to Kolkata, Prime Minister Nguyen Tan Dung was accompanied by the Minister of Trade Truong Dinh Tuyen, Minister of Science and Technology Hoang Van Phong, Minister of Fishery Ta Quang Ngoc, senior officials from the Vietnamese government and more than a 100 business delegates. ¶3. (SBU) Dung, starting his visit to India in Kolkata, the capital of CPM-governed West Bengal, evoked much communist nostalgia and symbolism, especially while coinciding with the U.S. Independence Day. Dung's first official event was laying a wreath at a memorial to Ho Chi Minh. The memorial is on what was formerly Harrington Street but was re-named Ho Chi Minh Sarani by the Left in 1969 as a slap to the U.S., since the U.S. Consulate is located on the street. Dung expressed appreciation for the CPM's support to his country during the Vietnam War, recalling the Bengali slogan "Amar Nam, Tomar Nam, Vietnam" (my name, your name, Vietnam). ¶4. (U) However, the reminiscing about old ties quickly shifted to the practical discussions over mutual commercial interests. After his meeting with Chief Minister Buddhadeb Bhattacharjee, 
Bhattacharjee told the press that they had discussed the possibility of collaborations between the two regions in dairy farming and aqua-culture. The Chief Minister said that two universities in Bengal would be collaborating with Vietnamese universities. He did not mention the names of the universities. Bhattacharjee also said that business delegations organized by the Bengal National Chamber of Commerce (BNCCI) and CII will visit Vietnam in the coming months to explore areas of opportunities for doing business. ¶5. (U) Addressing the Indo-Vietnam Business forum organized by Confederation of Indian Industry (CII) and attended by around 300 local businessmen, Dung said that India was an active investor in Vietnam but that the investments were not commensurate with the potential. Dung said, "The Look East policy of your country will help in promoting friendship with Vietnam. Our people remember the support during the struggle for independence.'' He added, "Vietnam offers political and social stability and a growing economy for investment." Dung extended an invitation to India's industry leaders to invest in areas such as information technology, electricity, petroleum, metallurgy, coal mining, transport, agriculture, fisheries, food processing and medicine. In 2006, Indian investments in Vietnam amounted to USD 600 million. Bilateral trade between India and Vietnam reached USD 1 billion in 2006. Both countries have set a target of doubling trade and reaching a volume of USD 2 billion by 2010. ¶6. (U) The Indo-Vietnam Business Forum hosted the signing of a Memorandum of Understanding between Phillips Carbon Black Limited (PCBL) - the largest domestic carbon black manufacturer owned by the RPG Group conglomerate, and the Vietnam National Chemical Corporation (Vinachem) for a 50,000 ton capacity carbon black plant. PCBL will have a controlling stake in the unit KOLKATA 00000197 002 OF 002 which is expected to start operations in 2009. The plant will be set up with an investment of approximately USD 60 million. Tire manufacturers are the main buyers of carbon black, which is why PCBL has found it attractive to invest in a manufacturing unit in Vietnam - a country rich in natural rubber resources. ¶7. (U) Prime Minister Dung's visit to eastern India was capped by a tour of the Tata Steel plant in Jamshedpur, in the state of Jharkhand. Last month, Tata Steel signed a USD 3.5 billion agreement with Vietnam Steel Corporation (VSC),Vietnam's largest steel company, to build a 4.5 million ton steel mill in Ha Tinh province, 340 km south of Hanoi. In the new joint venture, Tata Steel would own a majority stake of 65 percent, while VSC would hold the remaining 35 percent. Tata Steel would also have a stake of 30 percent in the Thach Khe Iron Ore Joint Stock Company, which would undertake mining in the Thach Khe iron ore mine. Tata Steel, the world's sixth largest steel conglomerate, already has a joint-venture partnership with VSC in rolling mills through its Singapore based subsidiary NatSteel. ¶8. (SBU) Comment: By making Kolkata the entry point of his visit to India, Dung highlighted the fact that Vietnam, one of the fastest growing economies in Asia, is keen to engage with Bengal's growing economy and to build on the special relationship it shares with the Left-ruled state. While old emotional bonds were highlighted, socialist nostalgia quickly gave way to commercial business interests. The visit also strengthened the possibility of more trade and investment relations between India and Vietnam as part of India's broader "Look East" policy. JARDINE