India signed a deal giving 500 million dollars in credit to Vietnam, for defence needs.
India today signed an agreement with Vietnam giving it 500 million dollars in credit to boost defence ties and deepen relations between the two countries.
"Our decision to upgrade our partnership to a Comprehensive Strategic Partnership captures the intent and path of our future cooperation. It will provide new direction, momentum, and substance to bilateral cooperation," Prime Minister Narendra Modi said after officials signed as many as 12 agreements, including in technology, cyber security, and health.
Prime Minister Modi's first visit to Vietnam is also the first visit by an Indian premier to the country in over 15 years.
Both India and Vietnam share concerns over growing Chinese presence in the South China Sea. China has in recent months built military assets in the region, despite protests by the international community.
About half of India's trade passes through the South China Sea.
"Our common efforts will also contribute to stability, security and prosperity in this region," Prime Minister Narendra Modi said after his meeting with Vietnam's Prime Minister Nguyen Xuan Phuc.
Providing credit facilities usually implies that Vietnam will have to source arms and ammunition from India as it looks to enhance its military capabilities. The two countries have already signed an agreement to build offshore patrol boats, in another step to giving a concrete shape to bilateral defence ties.
"The range of agreements signed point to the diversity and depth of our cooperation," Mr Modi said.
China has previously criticised India's cooperation with Vietnam in the defence sector. In 2014, in a similar deal India had agreed to give Vietnam 100 million dollars line of credit to buy naval patrol boats.
Both India and Vietnam have agreed to enhance business ties and improve trade between the two countries to 15 billion dollars by 2020.