India has extended $500 million Line of Credit to Vietnam for facilitating deeper defence cooperation with the south east Asian nation, as the two countries have elevated their ties to a Comprehensive Strategic Partnership to respond to increasing regional challenges.

Prime Minister Narendra Modi said after talks with his Vietnamese counterpart Nguyen Xuan Phuc , "Our decision to upgrade our Strategic Partnership to a Comprehensive Strategic Partnership captures the intent and path of our future cooperation. It will provide a new direction, momentum and substance to our bilateral cooperation”.

He said that the two countries have recognised the need to cooperate in responding to emerging regional challenges. Vietnam had earlier Strategic Partnership only with Russia and China.

Modi, who arrived here on Friday on his maiden visit to the country, described his talks with Vietnamese counterpart as "extensive and very productive" and said that they covered the full range of bilateral and multilateral cooperation.

Modi said, "I am also happy to announce a new Defence Line of Credit for Vietnam of USD 500 million for facilitating deeper defence cooperation. Our common efforts will also contribute to stability, security and prosperity in this region”.

The two countries signed 12 agreements in a wide range of areas covering IT, space, double taxation and sharing white shipping information.

An agreement on construction of offshore patrol boats was also signed by the two sides, signalling a step to give concrete shape to defence engagement between the two nations.

Modi has announced a grant of $5 million for the establishment of a Software Park in the Telecommunications University in Nha Trang.

"We agreed to tap into the growing economic opportunities in the region," said Modi.

Also Read: PM Modi to begin two nation tour to Vietnam, China today

By Prakriti Neogi