Indian businesses seek to enter Vietnam garment market
(VOV) - Indian businesses currently supply 2% of raw garment and textile materials to Vietnam annually, and they are aiming to dramatically increase the market share to 25% during the next few years.
The Ministry of Industry and Trade (MoIT) reports that two-way trade turnover in the garment sector has seen remarkable growth in recent years, especially after the signing of a Free Trade Agreement (FTA) between ASEAN and India in early 2010. In 2013, Vietnam imported US$419 million worth of textile materials from India, up 36% compared to 2012’s figure.
Vietnam Customs statistics show that in the first seven months of 2014, India exported cotton, fibre, and fabric to Vietnam, earning US$224 million, US$39.2 million and US$30.96 million respectively. India’s export turnover of garment, leather, and footwear accessories to Vietnam also fetched US$58 million.
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To grasp opportunities in Vietnam, Indian businesses have conducted two trade promotion programmes since the beginning of the year.
The Cotton Textiles Export Promotion Council of India (TEXPROCIL) sent 20 businesses to Vietnam in February 2014 to explore the market and seek partnerships. In August, 12 Indian garment companies also arrived in HCM City for an exchange programme to facilitate business connectivity between the two countries.
Indian ambassador to Vietnam Preeti Saran said that Vietnam is an important pillar in India’s “Look East” policy. Therefore, India gives priority to various areas of cooperation with Vietnam, and the garment sector is a case in point.
Moreover, India is now the world’s largest producer of natural and artificial fibres which paves the way for bilateral cooperation in the future. Meanwhile, Vietnam is the world’s fifth largest garment and textile exporter and the third largest importer of garment materials. That’s the reason India wants to become a leading supplier of raw materials to Vietnam.
Siddhartha Rajagopal, TEXPROCIL's executive director, said that TEXPROCIL recently sent several businesses specialising in supplying raw materials for the garment and textile sector to Vietnam to sound out opportunities.
During a recent visit in August, 12 large Indian businesses specialising in producing woven and knit fabrics and denim worked with 16 Vietnamese producers to learn about the import demand.
Siddhartha Rajagopal said that Indian fabric suppliers eye Vietnam as a primary market, expecting to increase their market share in Vietnam to 25% in the coming years from the current 2%.
He affirmed that Indian businesses will become a reliable supplier of high quality and right-priced raw material sources to Vietnamese garment and textile enterprises in the future.