The two countries, which held their 15th Joint Commission Meeting here, also inked an agreement for a 19.5 million dollar Line of Credit India will give to Vietnam.
After the meeting with his Indian counterpart Salman Khurshid during which crucial bilateral and regional issues were discussed, Vietnam Foreign Minister Pham Binh Minh, said both sides discussed the South and East China Seas, agreeing that UN law on freedom of navigation in high seas need to be respected.
"Our position is that we need to respect the law of UNCLOS to solve the issues in the South China Sea peacefully", the Vietnam minister said in a joint press conference here.
He said both sides have also reaffirmed that all the countries bordering the South and East China Sea have rights to their exclusive economic zones and that India can pursue "exploration and exploitation work in the exclusive economic zone of Vietnam".
The remarks came in the backdrop of continued Chinese objections over oil exploration projects undertaken by India in Vietnamese oil blocks. China has been claiming territorial sovereignty over South China Sea, a claim contested by its neighbours including Vietnam.
"India-Vietnam security and defence cooperation is robust and growing, based on shared interests and a convergence in our security perceptions," Khurshid said.
He said India has indicated any contentious issue "should be settled in a peaceful manner, through dialogue". PTI SAP
He has invited the Vietnamese Defence Minister to India later this year before the visit of the General Secretary of the Communist Party of Vietnam.
India and Vietnam also signed a USD 19.5 million Line of Credit for setting up Nam Trai-IV hydropower project and Binh Bo Pumping station.
He said both sides agreed to consolidate bilateral activities and add greater content to the partnership and bilateral relations in the fields of defence and security, trade and investment, science and technology, information technology, capacity-building and human resource development, agriculture, education, culture and other areas of common interest.
He said the institutional architecture of India-Vietnam strategic partnership is based on the joint declaration on Strategic Partnership of 2007 and dialogue mechanisms and agreements.
Vietnam has regularly reiterated its support to India's candidature for a permanent membership of an expanded UNSC. It has also signed the G-4 Draft Resolution on reforms of the UNSC, Khurshid said.India's economic ties have expanded with Vietnam receiving substantial Indian private sector investments and growing trade.
Bilateral trade has grown to USD 6.1 billion in 2012-13. "We are well on track to cross the target of USD 7 billion by 2015.
"Investments by Indian companies totals about USD 936 million In 86 projects in sectors such as oil and gas exploration, mineral exploration and processing, sugar manufacturing, agro-chemicals, IT, and agricultural processing," Khurshid said.
Recently, Vietnam had chosen Tata Power as developer for a USD 1.8 billion 2X660 MW Long Phu 2 Thermal Power Project in Soc Trang Province in southern Vietnam, despite strong competition from Korean and Russian companies.
It will be the single largest Indian investment in Vietnam when it comes through.
"We plan to establish an Indian Cultural Centre in Hanoi this year and hope that it will further promote cultural cooperation between the two countries.
"Archaeological Survey of India (ASI) is about to finalise an agreement on conservation of the ancient remains of the Cham Civilisation at My Son. This will help revive our ancient heritage and cultural links," he said.
He also spoke about supply of patrol vehicles to Vietnamese border guard organisation and said "this will be a major and unique expression of our solidarity and friendship".