Vietnam’s textile industry poised for major breakthrough

The country’s textile and garment exports reached US$34.75 billion between January and September, up 7.7 percent from the same period last year, signaling a clear recovery after a period of stagnation, said Vu Duc Giang, chairman of the Vietnam Textile and Apparel Association.

However, Vietnam remains heavily reliant on imported raw materials, with its import value for inputs standing at $16 billion during the nine-month period.

The fabric purchase accounted for $11 billion, underscoring a persistent dependence on foreign supply chains.

Despite this, Vietnam has risen to become the world’s third-largest textile exporter, moving beyond its previous role as a low-cost manufacturing hub.

Vietnamese textile products are now present in 138 markets worldwide, leveraging the advantages of 16 signed free trade agreements, a number expected to increase to 22 by 2027.

Notably, Vietnamese textile products have gained a strong presence in the Middle East and Africa.

In 2024, the Middle Eastern market, especially Islamic countries, generated $1 billion in revenue for Vietnam’s textile sector.

During the first seven months of 2025, this figure already reached $700 million.

This growth reflects Vietnam’s shift toward higher-end market segments, with a focus on design and technology-driven products, beyond just basic and mass-market offerings.

While the outlook is optimistic, logistics costs continue to be a main hurdle.

Dang Minh Phuong, chairwoman of the Ho Chi Minh City Logistics Association, stressed that success in capturing this opportunity hinges on apparel firms’ understanding of supply chain management and logistics.

“We are benefiting from the shift of orders from countries like China and Bangladesh to Vietnam.

“However, high logistics costs remain the biggest challenge,” she said.

“These costs reduce our competitiveness, and even with abundant orders, firms may be forced to accept lower profit margins in the short term, she stated.

Huynh Duy Sang, head of Financial Markets at ACB, noted a silver lining: both textile and logistics sectors earn primarily in foreign currency.

With the depreciation of the Vietnamese dong by 3 to 3.5 percent since the start of the year, Vietnamese goods have become cheaper and more attractive to international buyers.

He said that with expectations that the U.S. Federal Reserve will further cut interest rates, pressure on exchange rates may ease.

“The bank is ready to offer hedging solutions to help businesses stabilize costs and focus on their core operations,” Sang said.

Ngo Tan Long, deputy CEO of ACB, addressed concerns regarding new tariff measures.

Initially, banks were cautious about how these might affect the competitiveness of the Vietnamese textile industry, but current tax rates remain on par with key rivals like Bangladesh and Indonesia.

"ACB will continue to support the textile industry and is planning to expand its financing portfolio for the sector over the next two to three years,” Long said.

“For the logistics sector, we are offering working capital loans of up to VND8 billion ($303,760) with terms of up to 10 years,” he added.