Vietnam's textile and apparel (T&A) industry aims to strengthen its global position by generating exports worth $47-$48 billion by 2025. The industry’s exports rose by 1.8 per cent Y-o-Y in early 2024. This growth was fueled by free trade agreements and international market recovery.
With this, Vietnam has emerged as the second-largest exporter in the world, trailing only China, with export earnings rising by 11 per cent to $44 billion in 2024. Key export destinations for the country include the US, EU, Japan, and South Korea. Notably, Vietnam's exports to the US have doubled since 2018, reaching nearly 20 per cent in 2024, driven by order shifts from China.
Major corporations like Nike, Adidas, and Puma are relocating production from China to Vietnam, alongside FDI from Taiwan, South Korea, and Japan. Significant investments, such as Texhong Group's yarn factory expansion and Shenzhou International's $150 million investment, signal continued growth. Many Vietnamese firms have secured substantial 2025 export orders.
Despite this progress, challenges persist. Competition from Bangladesh, India, and Pakistan, with their lower labor costs and US GSP benefits, puts pressure on Vietnam. Vietnam's reliance on China for 80 per cent of raw materials makes it vulnerable to cost increases from US-China trade tensions.
The risk of US tariffs on Vietnamese textiles looms, particularly concerning origin of goods regulations. Vietnam must effectively manage this issue to avoid anti-dumping or trade defense tariffs.
To address these challenges, Vietnam is pursuing a multi-pronged strategy. This includes developing domestic fiber and fabric production, fostering supporting industries, and promoting domestic supply chains. The government is also working to facilitate small and medium-sized business participation in the global supply chain. Companies are encouraged to adopt advanced technologies like automation and AI for increased productivity and eco-friendly manufacturing.
The Ministry of Industry and Trade is actively diversifying export markets, prioritizing the EU, Japan, and South Korea to reduce dependence on the US and capitalize on existing FTAs. With strategic planning and leveraging opportunities, Vietnam is well-positioned to become a world-leading textile and garment center.
