India and Vietnam on Wednesday inked an agreement to promote oil exploration in South China Sea along with a slew of pacts, including an extradition treaty, to deepen trade, security and strategic ties between the two countries.

In all, six agreements were signed after Vietnamese President Truong Tan Sang and Prime Minister Manmohan Singh held comprehensive talks on issues of mutual interest, including situation in the region where they decided to launch a biennial Security Dialogue between their home ministries.

“India and Vietnam are maritime neighbours. We face common security challenges from terrorism, piracy and natural disasters. We believe that it is important to ensure the safety and security of the vital sea lanes of communication. We have agreed to continue and strengthen our exchanges in these fields,” Singh told the press after his meeting.

The pact between the Indian and Vietnamese state-owned oil companies includes new investments and the exploration and supply of oil and gas to the two countries.

Irked by the Indian exploration projects on Vietnamese blocks in South China Sea, Chinese authorities have raised objections claiming that it was in their area.

The Chinese claim on the South China Sea has been rejected by both India and Vietnam, saying as per the UN, the blocks belong to Vietnam.

India has also made it clear that its state-owned firm would continue to explore in the resource-rich South China Sea.

In the field of security cooperation, the two countries instituted a mechanism of a biennial dialogue on security issues between Ministry of Home Affairs and its Vietnamese counterpart.

“The Extradition Treaty signed today will provide a legal and institutional basis for our cooperation,” Singh said.

Noting that they discussed the situation in the Vietnamese Eastern Sea (also know as South China Sea), Sang said it was felt that the dispute in these waters should be settled peacefully according to the terms of the 1982 UN Convention on the Law of the Sea (CLOS).

The two sides also decided to increase the trade target to USD 7 billion by 2015 from the present mark of USD 2.7 billion apart from agreeing to work towards early finalisation of the India-ASEAN Free Trade Agreement in Services and Investment.

This is the first visit by the Vietnamese President outside the ASEAN region and reflects the importance attached by both sides to the relationship, Singh said.

Singh said he has conveyed India’s commitment to greater investment flows between the two countries.

“Several Indian companies are working in Vietnam, and we similarly welcome Vietnamese investments in India. We will continue to render assistance to Vietnam in its capacity building and human resource development efforts,” the Prime Minister said.

Apart from an extradition treaty, oil exploration agreement and a ‘Friendship’ pact to celebrate the 40th anniversary of the diplomatic relations next year, the other three accords were in the field of agriculture and fisheries research, cooperation in sports and tourism, and cultural exchanges.

Developing close relations with Vietnam is an important component of our Look East Policy, Singh said, adding, “We have agreed to strengthen our cooperation in regional mechanisms such as the ASEAN, the ASEAN Regional Forum, the East Asia Summit and the Asean Defence Ministers Plus Eight Dialogue”.

He said a strong India-Vietnam partnership “is a factor of peace, stability and development in the Asia-Pacific region. It is a partnership that stands on its own merits.”

India-Vietnam aims USD 7 bn bilateral trade by 2015

India and Vietnam today decided to work for an early conclusion of India-ASEAN free trade pact in services apart from setting a bilateral trade target of USD 7 billion by 2015 to give a boost to economic ties.

India and the 10-member Association of South East Asian Nations (Asean) have already implemented the free trade pact in goods last year and are engaged in intense negotiations to widen the base of the pact by including services and investments.

The announcements were made after Vietnamese President Troung Tan Sang and Prime Minister Manmohan Singh held comprehensive talks on bilateral issues to boost strategic and trade ties.

“We have set ourselves the target to increase it to 7 billion US dollars by 2015. We have agreed to work towards an early finalization of the India-ASEAN Free Trade Agreement in Services and Investment,” Singh said, adding India is committed to greater investment flows between the countries.

Last year, India-Vietnam bilateral trade stood at USD 2.7 billion.

Several Indian companies are working in Vietnam and we similarly welcome Vietnamese investments in India.

“We will continue to render assistance to Vietnam in its capacity- building and human resource development efforts,” he said.

Sang also sought Indian investments in sectors like infrastructure, oil exploration, power, IT and pharmaceutical.

The two sides also inked a pact in civil aviation, paving way for direct flights between the two country and also in the field of oil and gas exploration.