Ahead of Prime Minister Narendra Modi's visit to China, India on Saturday elevated its relationship with Vietnam from "Strategic Partnership" to "Comprehensive Strategic Partnership" while significantly deepening defence and security engagement with the southeast Asian nation "to advance our common interests".
"Our decision to upgrade our Strategic Partnership to a Comprehensive Strategic Partnership captures the intent and path of our future cooperation, " Modi said a joint press statement with Vietnamese Prime Minister Nguyen Xuan Phuc following delegation - level talks here.
"It will provide a new direction, momentum and substance to our bilateral cooperation.
Our common efforts will also contribute to stability, security and prosperity in this region. "
Russia and China are the other two countries with which Vietnam has comprehensive strategic partnerships.
India also offered a $500 - million defence credit line part of which will be used for the construction of offshore patrol boats by L&T and the Vietnam Border Guards.
Vietnam is among those countries in the region which have disputes with China over the South China Sea.
A joint statement issued stated that "both sides reiterated their desire and determination to work together to maintain peace, stability, growth and prosperity in Asia and beyond".
"Both sides also called on all states to resolve disputes through peaceful means without threat or use of force and exercise self - restraint in the conduct of activities that could complicate or escalate disputes affecting peace and stability, respect the diplomatic and legal processes, fully observe the Declaration on the conduct of parties in the South China Sea and soon finalise the Code of Conduct, " it stated.
In July, an international arbitration tribunal ruled in favour of the Philippines in its dispute with China over the South China Sea.
While the Philippines welcomed it, China reacted angrily calling it null and void with no binding force and that "China neither accepts it nor recognises it".
Calling for "utmost respect" to the UN Convention for the Law of the Sea, Saturday's joint statement said: "They (India and Vietnam) also recognised that the sea lanes of communication passing through the South China Sea are critical for peace, stability, prosperity and development. "
In his joint press statement with Phuc, Modi, stressing on the economic prosperity of the people of both countries through steps to secure them, said: "Prime Minister and I have, therefore, agreed to deepen our defence and security engagement to advance our common interests. "
He said the agreement on construction of offshore patrol boats was "one of the steps to give concrete shape to our defence engagement".
"I am also happy to announce a new defence line of credit for Vietnam of $500 million for facilitating deeper defence cooperation. "
The Prime Minister also said that the Asean region was "important to India in terms of historical links, geographical proximity cultural ties and the strategic space that we share".
Vietnam is India's country coordinator for the Association of Southeast Asian Nations (Asean).
"It (Asean) is central to our Act East Policy.
Under Vietnam's leadership as Asean Coordinator for India, we will work towards a strengthened India - Asean partnership across all areas, " Modi said.
India and Vietnam signed 12 agreements, including on cooperation in the field of cyber security and on exploration of outer space for peaceful purposes.
As part of his day's engagements, the Prime Minister called on Vietnamese President Tran Dai Quang who expressed his support for India's Act East Policy.
He also met with Vietnam National Assembly Chairperson Nguyen Thi Kim Ngan and General Secretary of the Communist Party of Vietnam Nguyen Phu Trong.
Earlier in the day, Modi was accorded a ceremonial welcome at the Presidential Palace in Hanoi.
After attending a luncheon banquet hosted in his honour by Prime Minister Phuc, he visited the historic Quan Su Pagoda, also known as Ambassadors' Pagoda here.
Modi arrived in Vietnam on Friday in what was the first prime ministerial visit from India to Vietnam after the visit of then Prime Minister Atal Bihari Vajpayee in 2001.
On Saturday evening, he left Hanoi for Hangzhou, China, to attend the two - day G - 20 Summit starting Sunday.