Vietnam is amongst the top exporters of textile and apparel products globally. Its T&A exports has registered a positive growth at a CAGR of 12% over the last five years to reach US$ 28.7 billion in 2016 while its imports have increased at a CAGR of 10% in the same period to reach US$ 16.1 billion in 2016. Vietnam’s textile and apparel trade balance recorded a surplus of around US$ 12.6 billion in 2016.
Despite being one of the largest exporter of T&A in the world, Vietnam is also one of the leading importer of T&A. Manmade Textiles is the largest imported category by Vietnam, representing about 54% of its total textile and apparel imports (2016). This is followed by cotton textiles, others and apparel with a share of 28.0%, 14.5% &3.4% respectively. Top 10 suppliers accounted for around 94% of textile and apparel imports by Vietnam. China& Honk Kong is the largest supplier accounting for 47% share followed by Korea and Taiwan with a share of 15% and 13% respectively.
India’s Textile and Apparel Exports to Vietnam
India is amongst the top supplier of T&A products to Vietnam. India’s exports of T&A to Vietnam stood at around US$ 351 million in 2016. It has registered a growth at a CAGR of 11% over the last five years. However, since 2013 India’s export to Vietnam has decreased. Also, India’s share in total Vietnam’s textile and apparel imports has come down from 4% to 2%, while exports of T&A products from other countries like China, Korea, USA, etc. has increased.
Cotton Textiles is the largest category with a share of 77% in India’s T&A exports to Vietnam. This is followed by manmade textiles and apparel having share of 17% and 4% respectively.
In the past few years Vietnam has emerged as one of the leading exporter of apparel in the world. Its apparel export stood at US$ 24.8 Bn. in 2016, which has grown significantly at a robust CAGR of about 18% since 2000. Continuing growth of apparel export from Vietnam will lead to higher consumption of intermediate textile products i.e., fabric as well as yarn. Currently, China, Korea, Taiwan are the leading supplier of yarn and fabric to Vietnam.
Vietnam is a significant importer of manmade based textile products with a share of 54% in its overall textile and apparel imports. A large part of the MMF based fabric manufactured and processed in India are low value added and primarily supplied to the mass domestic market. India’s product basket is majorly cotton focused. Hence in order to give an exponential growth to India’s export of textile products to Vietnam and other countries, Indian firms need to invest in MMF based textile manufacturing processes. Also, the firms that are already in manufacturing of Man-made based textile products should target Vietnam as a key market.
By Wazir Advisors