Viet Nam's textile and garment exports have grown 15 to 17 per cent per year since 2007. — VNA/VNS Photo

HA NOI  (Biz Hub) — The Ministry of Industry and Trade has ratified the textile and garment industry development plan 2020, with a vision for 2030.

The plan is expected to boost the industry's growth, said deputy minister Do Thang Hai at a meeting early this week.

Under the plan, the industry aims to achieve 55 per cent localisation rate by 2015, which will increase to 65 per cent and 70 per cent by 2020 and 2030 respectively.

During the 2013-2020 period, the industry plans an annual production growth rate of 12 to 13 per cent.

Exports in the 2013-2015 period are expected to increase by 10 to 11 per cent yearly, increasing by 9 to 10 per cent in the 2016-2020 period, and by 6 to 7 per cent in the 2021-2030 period.

The growth rate of the domestic market will be 9 to 10 per cent in the 2013-2015 period and 10-12 per cent in the 2016-2020 period, according to the plan.

Labour-intensive textile and garment firms will be moved to the rural areas, while those specialising in fashion production as well as in the supply of related services will be placed in urban areas.

According to the Viet Nam Textile and Apparel Association, Vietnamese clothing products are being exported to 50 countries and territories. The US is the largest importer of Vietnamese textiles and garments, accounting for 48 per cent of the industry's total export revenue.

Viet Nam's textile and garment exports have grown 15 to 17 per cent per year since 2007, said Nguyen Van Tuan, deputy head of the Viet Nam Cotton and Spinning Association and deputy secretary-general of VITAS. The export turnover is estimated to reach $40 billion in the 2020-2025 period, requiring 12 billion square metres of fabric and five million workers.

Textiles and garments currently make up 13.6 per cent of the country's total export value. That percentage is expected to rise when the country signs trade agreements.

The country is currently negotiating the Trans-Pacific Partnership Agreement (TPP) and the Viet Nam-EU Free Trade Agreement, which are expected to come into effect in the next couple of years.

When these agreements are signed, Vietnamese garment and textile products will enjoy zero per cent tax rate in the US and EU. At present, the average tax rates are 17.5 per cent and 9.6 per cent in these two markets, respectively.

Viet Nam's exports to the US and EU are still limited, according to experts. The US and EU markets spent $105 billion and $260 billion on garment and textile products respectively, last year. However, Viet Nam's exports accounted for only 8 per cent and 3 per cent of the US and EU market shares respectively. — VNS