India and Vietnam: Expanding Opportunities for European Corporates

While the opportunity profile differs between the two countries, India and Vietnam share several important characteristics: growing international relevance, increasing foreign investment, evolving supply chains, and rising demand for European expertise, technology, and equipment”, says Alexander Montanus, Head of Corporate & Investment Banking International Network. Also both countries have emerged as relevant locations for global companies seeking to diversify supply chains and reduce concentration risk through China Plus One strategies.

India combines strong economic growth, a large domestic market, and increasing integration into the global economy. “European companies more and more see the country not only as a sales market, but also as a strategic investment destination,” says Rajeshree Balsari, Head of Representative Office Mumbai, India.

“India is distinguished by its gradual increase in trade openness. Innovative export finance solutions, including Shopping Lines, can facilitate investment by providing long-term financing for European machinery and technology and allowing multiple supplier purchases to be combined within one financing framework. In an era where WTO-based globalization is under pressure, bilateral agreements like the EU-India FTA are more critical than ever.”

India presents opportunities across several sectors and business models.

Technology and services are one important area, as India’s strength lies predominantly in services rather than goods. While its share of global goods exports is around 1.8%, India commands a 4.3% share of global services exports, rivaling China in commercial service sectors. India is a global center for IT, fintech, digitalization, innovation, and global capability centers. This creates scope for European companies to build partnerships, access talent, and collaborate on technology-driven business models. The service orientation is already closely tied to Western markets, with the EU, US, and UK collectively accounting for about half of India’s service trade.

Cross-border investment is another area of growing relevance. European companies have invested approximately €150 billion in India, with around 6,000 firms active in diverse sectors. Conversely, Indian investment in Europe remains modest but poised for growth. Bilateral trade between Austria and India stands at around USD 3 billion, with approximately 160 Austrian companies operating in India. Austrian exports focus heavily on industrial machinery and engineering, while Indian firms such as software company Infosys and conglomerate Tata have established a presence in Austria, reflecting deepening economic integration. There is considerable upside potential for acquisitions, manufacturing investments, joint ventures, and industrial partnerships.

The EU-India FTA is expected to unlock substantial opportunities across multiple sectors. European companies stand to benefit in machinery and industrial equipment, automotive and mobility, chemicals, pharmaceuticals, renewable energy (hydro) and clean technologies, specialized manufacturing and technology-intensive industries, and infrastructure like railways. “India’s automotive market, the world’s fourth largest, will see significant tariff reductions, creating new avenues for European manufacturers,” the local expert reveals. On the Indian side, sectors such as textiles, leather, gems and jewelry, tea, spices, professional services, and IT are poised to gain from enhanced access to the European market.

Global Capability Centers (GCC): India is increasingly attractive for international companies establishing capabilities in technology, innovation, engineering, finance, and other specialized functions.

Vietnam has developed into an increasingly important market in Southeast Asia. “The country’s close economic relationship with the European Union, combined with its role in international manufacturing and trade, makes it relevant for European exporters and investors,” says Truyen Nguyen, Head of Representative Office Ho-Chi Minh City, Vietnam. The trade agreement between the European Union and Vietnam has supported the development of bilateral trade, which has continued to grow. 

Foreign direct investment has played a major role in the country’s development. Companies from around the world have invested in Vietnam, contributing to its manufacturing capacity, export activity, and integration into international supply networks. Vietnam also offers incentives for foreign investors and has become an established destination for international investment.

For European corporates, the market provides opportunities not only in trade, but also in industrial cooperation, investment, and the supply of technology and equipment.

European companies are particularly well positioned in areas where Vietnam requires advanced technology, machinery, and equipment.

Vietnam’s ongoing infrastructure development is creating demand across construction, transport, and related sectors. The country’s energy transition also requires investment and technology.

In addition, the expansion of technology-intensive manufacturing creates opportunities for European suppliers of machinery and industrial equipment as well as high-tech solutions. European companies can support Vietnam’s industrial development while building long-term commercial relationships in the market.

“For corporates entering or expanding in India and Vietnam, local market knowledge and reliable financial partners are important. Understanding the business environment, identifying counterparties, and structuring trade and investment transactions can be critical to successful market development,” knows Alexander Montanus. “Through our representative offices in Mumbai and Ho Chi Minh City, we can provide local market insight and act as a bridge between European corporates and counterparties in India and Vietnam.”

In Vietnam, RBI maintains relationships with major local banks and supports growing demand for financial-institution business and cross-border cooperation. “Our representative office in Ho-Chi Minh City also contributes market intelligence that can help relationship managers and product specialists understand market developments and client needs at an early stage,” notes Truyen Nguyen.

“In India, we support cross-border trade and investment through products including letters of credit, bank guarantees, and cash management solutions”, highlights Rajeshree Balsari. RBI also works with Indian banks, multinational development banks, and export credit agencies to support capital-expenditure imports and larger financing requirements. Such structures can be particularly relevant for European companies exporting machinery, equipment, and technology to India, as they can help facilitate longer-term financing and larger transaction volumes for Indian importers. Additionally, RBI provides expertise in currency risk management and USD exposure hedging, essential for companies engaged in cross-border projects.

"Our local market insight in India and Vietnam combined with a strong European network can help companies identify reliable partners and structure cross-border trade and investment effectively,” Alexander Montanus concludes. “This makes RBI a valuable partner for businesses expanding across these markets.”