Vietnam is among the few countries with single-party political system and communist party government. In fact, single-party political systems are exclusive to communist or socialist states like China, Vietnam, Cuba, Laos, and North Korea.But Vietnam has non-communist styled development features. Communist Party of Vietnam (CPV) holds monopoly political power and controls entire government and the state owned enterprises. The policy direction for the Party and the Government machinery is formulated in its national congress which is usually held once in every 5 years.  

The 4-days 14th National Congress of CPV concludes on 23rd January 2026. This conference decides on the policy directions and decisions of the country which are keenly observed by the trade partners and the competitors of Vietnam.Vietnam adopted mixed economy system during 1980s. Since then, Vietnam saw the rise of private players alongside its state owned enterprises. The dynamic administrative reforms enabled steep growth of private sector in the last ten years which was hitherto very low. Currently, private sector contributes 40% of Vietnam’s GDP (gross domestic product) and has scope to see higher contribution in the ensuing period.

Exports from Vietnam contribute 90% to the country’s GDP. With its $440 billion exports and $400 billion imports, Vietnam is already a trade surplus economy. Vietnam’s major importing partners are US (30%), China (15%), EU (14%), South Korea (7%), and Japan (6%). Major partners exporting to Vietnam are China (35%), South Korea (15%), US (5%), Japan (5%), and Taiwan (4%). Key materials include textile inputs, steel, electronics, automobile, and agriculture products. Vietnam transformed from assembly to high value manufacturing economy. With 17 free trade agreements and exports contributing 90% to GDP, Vietnam is among top global trade economies.

Its policies are very conducive for supporting industries such as parts, software, semiconductors, and equipment. The country is prioritizing high tech manufacturing by offering accelerated depreciation, fast track approvals, tax refunds, and low cost setups. India GDP is about 9 times that of Vietnam. But, in per capita GDP, Vietnam is double that of India. GDP growth of Vietnam is higher than that of India. The public debt to GDP of India is 80% plus and it is only 34% for Vietnam. As a percentage of GDP, the net FDI inflows are 1.5% for India whereas Vietnam has 4.5%. The contribution of manufacturing to GDP in India is 20% whereas it is 40% in Vietnam.

India’s exports to its GDP are 20% whereas they are 90% for Vietnam. India has current account deficit of 1% whereas Vietnam has 6% surplus. The economic freedom score of India is 53rd whereas Vietnam has higher score of 65. Average human life span in Vietnam is 10 years higher than in India. Even in other parameters such as inflation, poverty,such as inflation, poverty, unemployment, infant mortality, maternity mortality, human happiness, work productivity, etc., Vietnam is much better than India.

Vietnam has its own challenges including stagnant export growth, dramatic high credit growth, aging population, infrastructure gaps, and need for more capital. But, in contrast to typical communist styled economies, Vietnam has decentralization with high provincial autonomy and has grown from low-income to middle income economy. Vietnam allocates 7% of its GDP to public infrastructure. Excluding the single-party communist state feature, India can learn from Vietnam and explore greater bilateral trade given the economic harmony both the countries enjoy. The year 2026 marks 10th anniversary of Comprehensive Strategic Partnership agreement between India and Vietnam.

 This 10-years partnership saw mutual support in the bilateral trade which currently stands at $15.7 billion. Of this, India imports $10.3 billion from Vietnam and exports $5.4 billion.

India and Vietnam saw new collaborations in digital payment technologies, submarine operations, defence cruise missiles, defence technology, maritime security support, and Electric Vehicles. With scope to enhance bilateral trade between India and Vietnam up to $50 billion, India may influence Vietnam to upgrade from partner country in BRICS to a full-member and may explore more collaborations with Vietnam and learnings from Vietnam.

- Dr. Kishore Nuthalapati CFO, BEKEM Infra Projects Pvt Ltd, Hyderabad