Indian fabric investors have shifted their attention from China to Vietnam, which is billed as an emerging denim fabric manufacturing centre, in their search for potential suppliers of denim fabric.
The impressive growth of Vietnamese garment and textile in recent years, with US$31 billion in export revenue last year and a target of US$50 billion after 2020, has persuaded the choosiest customers worldwide, including Indian firms.
Denim goods accounted for 20% of the sector’s export revenue, according to the Vietnam Textile and Apparel Association (VITAS).
Although the sector is facing bottlenecks in its supplying chain, denim fabric production is a strong point of local producers with the localisation ratio of 55-60%, spurred by heavy investment in production line, and technologies.
Right after the third edition of the Denimsandjeans Vietnam Show organised in Ho Chi Minh City in June, many Indian companies expressed their wish to collaborate with Vietnamese partners in producing denim fabric.
CEO of Balaji Enterprises Sandeep Agarwal, founder of the Denimandjeans, said that the Vietnamese garment and textile, with increasing production capacity, is a magnet for foreign investors.
Meanwhile, Marketing Director of KG Fabriks Thamarai Selvan, noted that his company is planning to move its plants from China as more benefits are expected when having production facilities in Vietnam, including larger order volumes and skillful workers.
Anubha Industries Private and Vietnamese denim providers have reached certain agreement, and a trade cooperative deal will soon be announced, said marketing director of the firm Amit Desai.
According to Indian Consul General in Ho Chi Minh City K. Srikar Reddy, garment and textile sector is a priority in joint efforts to elevate the two-way trade to US$15 billion by 2020.
Currently, India has registered US$814 million in 176 projects in Vietnam, ranking 28th out of 126 countries and territories having investment in the country. Last year, India exported US$429 million worth of garment and textile products to Vietnam, an increase of 44% year on year. However, the figure was only a fraction of the import need of the Vietnamese garment and textile sector.