Vietnam’s textile and garment industry is set to earn USD 46 billion in exports in 2025.
Vu Duc Giang, chairman of the Vietnam Textile and Apparel Association, said the shortfall stems from persistent headwinds in 2025, including new US tariffs linked to escalating US China trade tensions, weak demand in the US and EU, and late season typhoons that disrupted production and domestic logistics.
Geopolitical fragmentation, the forthcoming EU Carbon Border Adjustment Mechanism and stricter rules of origin have further disrupted supply chains. Global brands are placing smaller, fragmented orders and shifting some volumes to lower cost competitors.
Cao Huu Hieu, chief executive officer of state owned group Vinatex, warned that the industry’s near total reliance on imported cotton at 100 per cent and fibres at 90 to 95 per cent, along with dyes and chemicals, leaves Vietnam vulnerable if the US tightens tariffs on products with high third country content.
He added that most producers remain concentrated in low margin manufacturing stages, with limited capacity for design, branding or distribution, eroding the labour cost advantage that once underpinned growth.
By 2030, the industry targets export revenue of USD 64.5 billion, annual growth of 6.5 to 7 per cent, a domestic market worth USD 8 to 9 billion, a localisation rate above 60 per cent, and the emergence of recognised Vietnamese fashion brands under a green and digital roadmap.
To achieve these goals, Giang urged firms to diversify markets, products and customers, invest in upstream raw materials, and develop a skilled workforce alongside technological upgrades. Several factories are completing preparations for 2026 launches of high value technical garments for healthcare, industrial and aviation sectors, which he described as key profit drivers.
Industry leaders said restructuring must proceed on two fronts: strengthening domestic capabilities through localisation, green production and technology upgrades, while expanding strategic overseas investments to secure cost advantages, tariff incentives, efficient logistics and cross border management capacity.
From 2026 to 2030, growth will no longer depend on low costs but on quality, sustainability and risk management. Companies that master technology, secure green credentials and balance domestic and offshore production are expected to emerge as winners.
As part of this transition, the industry is shifting toward FOB and ODM models, taking greater control over design, materials sourcing, logistics and inventory management in export markets, a decisive step toward full production ownership.