Vietnam Textile Industry Issues Plan for 2020 and Beyond

Posted by Reading Time: 3 minutes

HANOI – Vietnam’s Ministry of Industry and Trade has recently ratified a textile and garment industry development plan for 2020, with a vision for 2030.

According to Deputy Minister Do Thang Hai, the plan will do much to boost the growth of the textile industry in Vietnam.

Professional Service_CB icons_2015RELATED: Dezan Shira & Associates’ Global Services

The plan lays out a series of milestones to be reached:

With respect to localization rate within the industry, the government has set the goals of:

  • 55 percent by 2015;
  • 65 percent by 2020; and
  • 70 percent by 2030.

The development plan also pushes for an annual production growth rate of 12 to 13 percent during the period 2013-2020.

Export goals have been set as follows:

  • 10 to 11 percent annual growth in the 2013-2015 period;
  • 19 to 21 percent annual growth for the 2016-2020 period;
  • 25 to 28 percent annual growth for the 2021-2030 period; and
  • Export turnover is predicted to reach US$40 billion during the 2020-2025 period – this will require 12 billion square meters of fabric and five million workers.

It is also predicted that the domestic market will see a growth rate of nine to 10 percent during the 2013-2015 period and 10-12 percent during the 2016-2020 period.

Additionally, firms which are engaged in labor-intensive textile and garment production will be relocated to rural areas, whereas those firms engaged in fashion production, and related services, will be located in urban areas.

Vietnam’s textile industry

Vietnam’s textile industry is playing an increasingly large role in the country’s economy – It produces products that are exported to over 50 countries around the world, with the U.S. as the largest importer of Vietnamese textile products.

According to Nguyen Van Tuan, deputy head of the Vietnam Cotton and Spinning Association, since 2007 the country’s textile exports have seen a growth rate of 15 to 17 percent per year.

Additionally, 13.6 percent of Vietnam’s total export value is made up of textiles and garments.  The forthcoming implementation of free trade agreements (FTA), such as the Trans-Pacific Partnership and the Vietnam-EU FTA, are expected to boost this percentage of exports.

Once these FTAs are completed, many of Vietnam’s products will be able to take advantage of zero percent tariff rates in the U.S. and the EU – currently the average tax rates are 17.5 percent and 9.6 percent in these two markets, respectively.

Asia Briefing Ltd. is a subsidiary of Dezan Shira & Associates. Dezan Shira is a specialist foreign direct investment practice, providing corporate establishment, business advisory, tax advisory and compliance, accounting, payroll, due diligence and financial review services to multinationals investing in China, Hong Kong, India, Vietnam, Singapore and the rest of ASEAN. For further information, please email vietnam@dezshira.com or visit www.dezshira.com.

Stay up to date with the latest business and investment trends in Asia by subscribing to our complimentary update service featuring news, commentary and regulatory insight.

Related Reading

An Introduction to Doing Business in Vietnam 2014 (Second Edition)
An Introduction to Doing Business in Vietnam 2014 (Second Edition) provides readers with an overview of the fundamentals of investing and conducting business in Vietnam. Compiled by Dezan Shira & Associates, a specialist foreign direct investment practice, this guide explains the basics of company establishment, annual compliance, taxation, human resources, payroll, and social insurance in the country.

Foreign Investment Needed for Infrastructure and Agriculture Projects in Vietnam

Vietnam TPP Update: Edging Closer to Completion

Regional Spotlight: Vietnam’s Mekong River Delta

Foreign Garment and Textile Manufacturers Weave Their Way to Success in Vietnam

Leave a Reply

Your email address will not be published. Required fields are marked *