10:55 | 23/10/2015 Cooperation
(VEN) - Vietnam is increasingly attractive to Indian textile and garment businesses thanks to great advantages in terms of technology and human resources for export textile and garment production, and its participation in Trans-Pacific Partnership (TPP) negotiations. Indian Ambassador to Vietnam Shrimati Preeti Saran believes textiles and garments will be a new spearhead for economic cooperation between the two countries.
Photo: Can Dung
Shortly after TPP negotiations ended, a delegation of 40 Indian textile and garment companies recently came to Vietnam to seek investment opportunities through a Vietnam-India Textile Cooperation Conference. According to Vishvajit Sahay, Joint Secretary at the Indian government’s Department of Heavy Industry, very few Indian companies have invested in Vietnam in this field. However, Vietnam, as a TPP negotiator, has become an attractive possible destination for Indian textile and garment businesses.
Vietnam Chamber of Commerce and Industry Vice Chairman Doan Duy Khuong said Vietnam was the world’s second largest textile and garment exporter with major export markets including the US, the EU, and Japan. Thanks to the TPP, Vietnam has attracted global groups from the Republic of Korea, Chinese Taipei, and Hong Kong (China) to invest hundreds of millions of US dollars in the sector. Therefore, Indian businesses could expect great opportunities, he added.
“Although Vietnam is a leading global textile and garment exporter, last year it had to import US$12.5 billion worth of materials, mostly cotton, from different countries, including India. Hopefully, Vietnamese and Indian businesses will increase cooperation in the context of the broadening and deepening integration of both countries into the global economy,” Khuong said.
Vietnam and India do not have competitive relations in the textile and garment industry. According to Indian Ambassador Shrimati Preeti Saran, Vietnamese products have advantages when accessing high value markets, but Vietnamese businesses still depend on material imports and remain weak in management as most of them are small to medium in size. Meanwhile, Indian textile and garment businesses have advantages in terms of materials and technology. “The fact that they are mutually complementary will provide great cooperation opportunities for the two sides,” the ambassador said.
Vishvajit Sahay said the Indian government recently approved a US$300 million credit program that provides preferential loans for Indian businesses that export to or invest in the Vietnamese textile and garment sector, and Vietnamese businesses that want to import textile and garment materials from India.
Deputy Minister of Industry and Trade Do Thang Hai said India provided good quality and perse textile and garment materials. Moreover, under the ASEAN-India Free Trade Agreement, Vietnam and India are committed to reducing taxes on some products including textiles and garments. This allows Vietnamese businesses to seek new material supply sources and change their production models to create higher quality products.
Data from the Ministry of Industry and Trade show that trade between Vietnam and India reached US$5.59 billion in 2014, an increase of 9.84 percent compared with 2013, and this included US$2.46 billion of Vietnamese exports to India, and US$3.13 billion worth of imports from India. Major Vietnamese exports to India included computers, electronic products, mobile phones and accessories, auto components, rubber, chemicals, pepper, fibers, and wood products. Vietnam imported from India products such as machinery and equipment, seafood, pharmaceuticals, corn, iron and steel, cattle, petroleum, and materials for textile and garment production.