Indian denim producers are evincing interest in setting up production facilities in Vietnam, which is emerging as a denim fabric manufacturing centre.
Denim products accounted for 20% of Vietnam's garment and textile exports of US$ 31 billion last year. By 2020, the country's textile and apparel exports are targeted to reach US$ 50 billion, according to Vietnam Textile & Apparel Association (VITAS).
Although the denim sector faces bottlenecks in its supply 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 interest to collaborate with Vietnamese partners in producing denim fabric. 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 skilled workers. Anubha Industries is learnt to have reached a collaboration with a Vietnamese denim producer.
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 invested 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 garments and textiles to Vietnam, an increase of 44% year on year. However, the figure was only a fraction of the import needs of the Vietnamese garment and textile sector.