Though Vietnam’s exports of textile-garment of increased in the first eight months of the year but it was a tad slower than the same period last year. The country shipped textile-garment products worth $18.7 billion in the January-August period (up 4.4 per cent) year-on-year, according to the Vietnam Cotton and Spinning Association (VCOSA).

VCOSA vice chairman Nguyen Hong Giang observed that due to a lack of orders and falling demand from global markets, growth slowed down compared to previous years. If the rough situation continues, things will get harder. Then it will be difficult for the sector to earn revenue of $29 billion this year which is even lower the target of $31 billion set earlier this year, Giang said. Decrease in export orders resulted from mounting competition from rivals including China, India, Cambodia, Bangladesh, Myanmar, and Sri Lanka. In addition, Cambodia and Myanmar enjoy tax incentives when selling textile-garment products to the European Union (EU), making their products even more competitive. Besides competition, domestic apparel firms are grappling with difficulties, brought about by the minimum wage rise and regulations on inspections.

Fewer FDI approvals have been registered for the textile and garment industry this year than in previous years. In 2014 and 2015, many foreign enterprises had shown interest in investing in the sector to capitalize on opportunities from the Trans-Pacific Partnership (TPP) trade agreement which allows firms to enjoy tax breaks when exporting products to member states.