ietnam’s textile and garment industry has rebounded strongly in 2025, reclaiming its growth momentum after two years of global market volatility. Export turnover reached $34.75 billion in the first nine months — a 7.7% year-on-year increase, signaling renewed resilience in one of the country’s largest export pillars, according to Vietnam Textile and Apparel Association (VITAS).
With improving global demand and diversification of buyers, the sector is projected to hit $47–48 billion in export earnings by year-end, according to Vietnam.vn.
Value shift beyond contract manufacturing
The industry is rapidly moving up the value chain. Vu Duc Giang, Chairman, VITAS, noted that a rising share of Vietnam’s exports now consists of high-value-added and branded products, reflecting a shift from low-cost processing toward innovation and design.
Vietnam has climbed to third place globally among textile and garment exporters — a remarkable rise from its earlier role as a basic manufacturing hub. Products are now shipped to 138 countries, supported by 16 free-trade agreements (FTAs), with plans to expand that to 22 by 2027, according to VITAS.
Emerging markets such as the Middle East and Africa are becoming growth hotspots. Exports to Islamic economies reached $1 billion in 2024, and by July 2025, revenue from the Middle East had already hit $700 million.
Mounting operational pressures
Despite the rebound, Vietnam’s textile and garment businesses face multiple cost and policy headwinds:
Production costs: Operating expenses are 40–45% higher than in Indonesia, Malaysia, or Myanmar, even though Vietnam’s labor productivity is 40% higher, according to en.baoquocte.vn.
Logistics bottlenecks: Freight and warehousing costs have surged. Despite salaries of $1,300–1,500 per month, firms face driver shortages, according to the Ho Chi Minh City Logistics Association.
Capital constraints: Shifting from traditional CMT (Processing) to FOB and DDP models demands larger working capital. Giang of VITAS urged banks to offer tailored credit solutions matching export contract terms.
Trade policy risks: The US imposed a 20% reciprocal tax on Vietnamese apparel (reduced from 40%), impacting orders. Some buyers now require suppliers to absorb part of the tariff, compressing profit margins.
Input dependence: Vietnam still imports 100% of its cotton and up to 95% of synthetic fibers, with nearly all dyes and chemicals sourced abroad. This heavy dependence poses traceability and compliance risks under tightening rules of origin.
Green growth and automation acceleration
While cost pressures persist, the industry continues advancing automation and sustainability initiatives. Vietnam now ranks second only to China in regional supply-chain modernization, with leading factories introducing smart machinery, wastewater recycling, and renewable-energy integration, according to Vinatex.
Cao Huu Hiếu, General Director, Vinatex, said the company aims to become a complete green-fashion solutions provider. From yarn and fabric to finished garments, they are focusing on circular, recycled, and traceable products.
Such transformation aligns with global buyer expectations, particularly from EU and US brands that increasingly tie sourcing decisions to verified sustainability performance.
Strategic direction for Vietnam’s textile future:
- Localize raw-material supply — strengthen domestic fiber, dyeing, and chemical production.
- Invest in automation & green technology — reduce cost disparities with competitors.
- Upgrade logistics — digitize warehousing and optimize inland transport.
- Diversify markets — deepen presence in the Middle East, Africa, Latin America.
- Develop Vietnamese brands — move from OEM to ODM and OBM models through design and brand investment.
- Enhance financing frameworks — promote export-friendly banking instruments tailored to modern trade terms.
If Vietnam achieves its export target of $48 billion in 2025, the sector will reaffirm its role as a global textile powerhouse. Yet sustaining this trajectory demands deeper supply-chain integration, design capability, and environmental compliance.
As global buyers increasingly link procurement to ESG credentials, Vietnam’s ability to balance competitiveness with sustainability will determine how strongly it leads Asia’s next era of textile manufacturing.
Source: Textile Today
