As global consumption cools and competition intensify, Vietnam's textile and garment sector is embarking on a strategic overhaul, pivoting away from output-driven expansion towards a model centred on value, productivity and sustainability.
Industry leaders said that the shift aims to secure long-term competitiveness while maintaining steady production growth. The new approach prioritises higher value-added manufacturing, improved quality of products and services, and stronger brand recognition for Vietnamese textiles in international markets.
Under this strategy, the sector is targeting annual export growth of 15% to 16%, even as global demand remains constrained. However, Truong Van Cam, vice chairman of the Vietnam Textile and Apparel Association (Vitas), acknowledged that the target presents considerable challenges.
Global trade growth is fluctuating between 2% to 5%, while the textile and garment industry worldwide is expanding by only 2% to 3%, limiting room for aggressive export gains.
Compounding the pressure, competing nations are stepping up policy support for their textile sectors, especially economies heavily reliant on the industry. Against this backdrop, Vitas has set an export goal of US$49–49.5 billion for 2026, equivalent to growth of around 8%.
Le Tien Truong, chairman of Vietnam National Textile and Garment Group (Vinatex), said the industry must aim for a trade surplus exceeding $24 billion by 2026 if it is to meaningfully contribute to the country's broader economic growth target of around 10%.
A key hurdle lies in the sourcing of raw materials. While importing materials remains administratively convenient, with no requirement for upfront value-added tax (VAT) payments and streamlined procedures, purchasing domestically produced materials often involves VAT prepayments and additional administrative steps. This has discouraged enterprises from increasing their reliance on local suppliers.
Industry leaders are therefore calling for tax reforms to incentivise the use of domestic materials in export manufacturing. In the past, policies such as a 50% reduction in turnover tax provided substantial support to exporters. Similar mechanisms, they argue, could strengthen domestic supply chains and enhance overall value retention within the country.
Raising worker incomes is another priority. To directly contribute to GDP growth, enterprises will need to increase wages by approximately 10%. Achieving this, however, will require improvements in labour productivity and a faster transition to automated production models rather than simply expanding the workforce.
Truong has proposed exploring partial corporate income tax deductions for companies that raise wages by more than 10%, arguing that such measures would give labour-intensive exporters more room to reward workers while expanding local sourcing.
Looking ahead, the sector has outlined ambitious long-term goals. By 2030, it aims to achieve export turnover of $64.5 billion, with average annual growth of 6.5% to 7%, while developing the domestic market to a size of $8 to $9 billion. Strategic priorities include increasing the localisation rate to over 60%, accelerating digitalisation and "greening" production processes, and building globally recognised fashion brands.
Diversification of markets and customers will also be crucial. Companies investing in green standards, automation and artificial intelligence are expected to gain a competitive edge. Industry representatives see opportunities arising from new-generation free trade agreements, which could help the sector transition from fast fashion to more sustainable production aligned with global consumption trends.
The first Spring Fair 2026, held in early February in Ha Noi, was viewed as an important platform for attracting both domestic and international partners. Beyond exports, the event highlighted growing attention to the domestic market as a complementary growth driver.
Trade fairs and supply–demand matching initiatives, alongside B2B networking and overseas promotion programmes, are expected to play a larger role in strengthening market access. Enterprises are also being urged to conduct thorough market research and comply strictly with regulations on traceability, rules of origin, labelling and packaging requirements before entering new markets.
Despite headwinds, the industry recorded solid results in 2025. Total export turnover was estimated at $46 billion, up 5.6% from 2024, allowing Vietnam to maintain its standing as the world's second-largest textile and garment exporter.
Textiles and garments currently have the highest domestic value-added ratio among major export sectors, retaining an estimated $23 billion within the country through wages, corporate profits and contributions to supporting industries.
The US remains the largest export destination, accounting for around 40% of total turnover. Exports to the US in 2025 were estimated at $18.6 billion, marking growth of more than 11% compared with the previous year.
While concerns over fluctuating reciprocal tax policies and potential tariff risks persist, industry representatives say proactive adaptation and steady production have enabled businesses to protect market share and seize new opportunities — reinforcing the sector's resilience during a period of global uncertainty.
