Clearest evidence of how completely Vietnam has captured the 'China plus one' moment is its trade relationship with the US. In H1 2026, Vietnam's trade surplus with the US touched $114 bn, the largest of any country. US imports from Vietnam were up about 40% y-o-z, driven by companies reorienting supply chains away from China.

Vietnam's success in building an overwhelmingly large export channel is worth examining in India. It's not a story of low wages alone, but also of institutional predictability, tariff simplicity, an extraordinarily wide FTA network, and a state apparatus organised end-to-end around courting and retaining GVC anchors.

India has comparable or larger advantages - market size, engineering talent and capital markets. But it lags on these fronts. Fortunately, this doesn't require reinventing India's economic model but executing at scale on things Vietnam has proven to work. One corrective to the usual argument that Vietnam merely imports from China to export to the West is that Vietnam's exports to China are worth $70 bn. India's are $17-20 bn.

ET Bureau

The world is your marketplace

6 ingredients have made Vietnam a powerhouse exporter:

Tariff simplicity Vietnam's simple average applied tariff is around 3.4%, with a trade-weighted average of near 1%. Effective input tariffs for GVC manufacturers are close to zero, and customs classification disputes are rare, because Vietnam has built its tariff and rules-of-origin regime for a small number of high-volume GVC categories rather than the sprawling, exception-laden, litigation-creating schedules in India.

Top-level courtship In August, Vietnam's president To Lam met Qualcomm CEO Cristiano Amon on the same day its PM Le Minh Hung met Samsung CEO Roh Tae-moon. This signals to a global C-suite that the relationship is a state priority, not a departmental one.

Institutional infra for top exporters Monthly PM office reviews with top exporting GVCs helps policy intent overcome firm-level bottlenecks far faster than an annual budget-cycle, or occasional investor-summit approach. Vietnam's success metric for such investors as being 'net foreign exchange-positive within 10 yrs' should be read as the operating principle officials apply, rather than any published government formula.

Unmatched FTA lattice Vietnam sits inside Asean, RCEP, CPTPP, the EU-Vietnam FTA, and a growing set of bilaterals, giving its exporters near- duty-free access to markets covering the large majority of world GDP, while importing inputs duty-free too.

Scale first, DVA later Vietnam deliberately accepts low domestic value addition (DVA) in the early years of a GVC relationship, targeting only 'net forex-positive within 10 yrs' the same way China did in 2002-15. This is a conscious trade-off against India's more common instinct to gate incentives on local content and value-addition thresholds from year one, which can filter out very high-volume assembly investments that build scale, skills and supplier ecosystems first.

Competitive, predictable tax treatment Zero effective export taxation and a stable corporate tax/incentive regime for GVC investors removes a second layer of negotiation friction that in India often plays out state-by-state and scheme-by-scheme.

ET Bureau

Ready for take-off

India should adopt a bold, 3-yr reform agenda where the primary task is sequencing and follow-through, mapped against 6 Vietnamese actions:

Move toward a small number of tariff bands for GVC-relevant inputs with pre-published, binding classification rulings. This can be done Asap.

Create a Top 30 Exporters Council chaired at PMO level, paired with state-level counterparts in the 5-6 states that host bulk of India's GVC-scale electronics and auto-components manufacturing, so the engagement is continuous and high-level.

Monthly, not annual, review cadence with these 30 exporting GVCs, with the authority to resolve bottlenecks in real time.

Britain, the EU, EFTA and New Zealand deals are wins on paper. The 3-yr priority is exporter awareness, digitised certificate-of-origin issuance, and rules-of-origin simplification, so utilisation rates approach Vietnam's. India should also quickly conclude a trade deal with the US, still the largest market for Indian goods.

Lower or phase in domestic value-addition thresholds in the first 3-5 yrs of a GVC investment, converging toward Vietnam's 'net-forex-positive in 10 yrs' logic.

Stabilise and simplify the export tax and incentive regime, reducing the degree to which GVC investors must separately negotiate state-level land and power terms on top of central schemes - a single, published national compact that states can opt into.

None of these 6 requires a change in India's economic model. They require sequencing, cadence and predictability, executed with the same diligence and continuity Vietnam has shown for two decades.