Vietnam’s garment and textile sector is on track to rake in 46 billion USD in export revenue this year, falling short of the 48-billion-USD goal and underscoring mounting pressure for deep restructuring as global headwinds expose structural vulnerabilities.
Vu Duc Giang, Chairman of the Vietnam Textile and Apparel Association (VITAS), attributed the 2-billion-USD gap to persistent global headwinds in 2025, including new US tariffs triggered by escalating US-China trade friction, subdued demand in the US and EU, and late-year typhoons that halted factories and snarled domestic logistics.
Geopolitical fragmentation, the looming EU Carbon Border Adjustment Mechanism and stricter rules-of-origin requirements further disrupted supply chains, prompting brands to place smaller, fragmented orders while shifting some volume to lower-cost rivals.
Cao Huu Hieu, CEO of State-owned giant Vinatex, warned that Vietnam’s near-total reliance on imported cotton (100%) and fibres (90-95%), plus dyes and chemicals, leaves the sector exposed if the US tightens tariffs on products with a high rate of origin from a third-country.
Producers remain clustered in low-margin production stages with limited in-house design, branding or distribution capability, eroding the labour cost edge that once fueled growth.
By 2030, the industry aims for 64.5 billion USD in exports, with an annual growth of 6.5–7%, a domestic market worth 8–9 billion USD, a localisation rate exceeding 60%, and the rise of well-known Vietnamese fashion brands following a “green and digital” roadmap.
To meet these goals, Giang urged companies to diversify markets, products and customers, plug raw material gaps with new investment, and build a skilled workforce alongside technological upgrades. Several factories are finalising the last steps for 2026 launches of high-value, technical apparel for healthcare, industrial and aviation uses, which, he described as pivotal profit drivers.
Industry leaders argued that the sector must simultaneously enhance domestic production, including boosting localisation, greening operations and upgrading technologies, while expanding strategic investments abroad to secure cost advantages, tariff incentives, efficient logistics and cross-border management capabilities.
For 2026-2030, the industry will move on two parallel tracks: raising its competitiveness at home and enlarging its global footprint. Growth will no longer rely on low costs but on quality, sustainability and risk management. Winners will be companies that master technologies, secure green credentials, and balance local and offshore footprints.
With a shift toward sustainability and circular economy practices, it is transitioning to FOB (free on board) and ODM (original design manufacturing), taking control of design, materials, logistics and inventory management in destination markets, a decisive step toward full production ownership.
