According to Ton Sinh Thanh, Ambassador of the Vietnamese Embassy in India, the country once held a “Vietnam, Cambodia and Laos Investment Business Opportunities” conference in the city of Coimbatore in the southern region. More than 70 Indian companies Textile and fiber industry groups including well-known printing companies LaxmiGroup, TheKurdandMlsGroup, ElgiEquipments, KGDenim, K.P.R.Mill and PremierMillsPrivate attended the meeting and negotiated with representatives of Vietnamese manufacturers and Vietnamese industrial zone developers to find cooperative investment opportunities in Vietnam.
Vietnam’s textile and garment industry has been booming recently, accounting for a high proportion of Vietnam’s total exports. However, Vietnamese manufacturers still have to rely on imported raw materials, including yarn and fabrics from India. Because the member countries of the Trans-Pacific Economic Partnership (TPP) will adopt the “Yarnforward” origin identification rules, only by expanding investment and production in Vietnam or importing raw materials for the textile industry from TPP member countries can they enjoy TPP tariff preferences. This is the case for India. It will be a good time for manufacturers to invest in the production of textile raw materials in Vietnam in the future.
India is the second largest supplier of cotton, fiber, fiber fabrics and cotton yarn in the world. The annual production of textile raw materials is approximately US$100 billion, of which US$40 billion of raw materials are exported. Vietnam imported US$550 million in yarn, fibers and fabrics from India last year (2015).
The Vietnam Textile and Apparel Association (VITAS) and the Vietnam Textile and Apparel Corporation have received more than 10 delegations of Indian textile manufacturers last year to discuss the feasibility of Indian manufacturers investing and setting up factories in Vietnam to enjoy Vietnam’s TPP regulations Preferential tariffs on textile exports.
Nguyen Son, president of the Vietnam Cotton Yarn Association, said that the Vietnamese textile industry welcomes Indian manufacturers to invest in factories producing raw materials for the textile and garment industry in Vietnam to reduce the import risks of Vietnamese manufacturers. According to VITAS statistics, Vietnam spent approximately US$16 billion importing textile raw materials last year, of which fabrics accounted for more than US$10 billion.
