Vietnam has invited Indian investment in its apparel production. Since Vietnam joined the Trans-Pacific-Partnership agreement, Indian apparel firms that invest and run their production in Vietnam can enter leading markets such as the US, the EU, Japan and Canada with a zero tariff.

Vietnam has highlighted favorable conditions for investment such as a convenient infrastructure, competitive labor costs, central and local incentives to stimulate investment on land leasing, and tariffs. In addition the country has committed to reforms and projects the social environment in the country as friendly.

To bolster bilateral cooperation in the sector, India has offered a $300 million preferential credit for its business projects in apparel in Vietnam within a decade. However, while an opportunity has come to shift investments to Vietnam, not just for garment but even for textile companies, Vietnam doesn’t grow cotton and needs textile items for making garments. Not many Indian firms will be able to seize the moment.

To set up a decent-sized textile or garment unit in Vietnam, and gain from the duty advantage, a company needs to invest at least Rs 1,000 crores. In an atmosphere of a global slowdown, a massive liquidity crunch and stressed balance sheets, it’s not possible for many Indian companies to move out immediately and invest.