"We know the evils of colonialism. They are fresh in our minds," Madhav said while delivering a lecture on 'Emerging Horizons in India-Vietnam Relations'.
"It is important for us to make sure that the 21st century version of the same colonialism does not return to haunt us and succeed," added Madhav, who is affiliated to India Foundation, a BJP-linked think thank.
His comments come in the backdrop of China increasingly asserting its claim over the Spratly archipelago in the South China Sea, which has overlapping claims from Vietnam and other littoral southeast and east Asian countries.
"Geopolitics in the Indian Ocean region makes the possibility of neo-colonialism a reality with countries trying to dominate others through money, market and through military," he added.
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Madhav's remarks also assume significance in the wake of the ongoing stand-off between Chinese and Indian troops in the Doklam area near Sikkim.
India has commercial interests in the South China Sea, which hosts one of the major Sea Lanes of Communications (SLOCs).
Contending that the Indo-Pacific region had emerged as a "new global powerhouse", Madhav said the global power axis had shifted from the Pacific-Atlantic to this region.
"Trade and tyranny co-exist in the backyard of many countries in the region," Madhav said.
It is important in such a scenario for countries like India and Vietnam to come together to ensure that "sovereignty, security and sentiment of all the countries are protected and maritime laws respected", the BJP leader held.
He added that the two countries should "strive" to evolve an Indian Ocean maritime order that ensured peace, stability, freedom of navigation and overflight and non-interference of outside power in the affairs of the region.
The envoy said Indian investment in Vietnam stood at USD 775 million since 1998, ranking 27 in the list of foreign investors in the southeast Asian country.
"We should focus on making our strategic partnership truly comprehensive. This means we need to put more effort on economics, science & technology, culture and education," Ton said.