It was predicted that the end of the MFA will provide opportunities for exporters of RMG from India & China to grow their exports at an exorbitant rate & thus eating up the share of neighboring low cost supplier countries like Bangladesh, Sri Lanka & Pakistan and Vietnam.

The end of the Multi-Fiber Agreement (MFA) on 1st January 2005 therefore marked the beginning of a significant era in RMG exports from Vietnam.   However, as per WTO figures, Vietnams share in World Exports of Clothing was 0.90% in the year 2000 which was 1.76% in the year 2005.  Though the growth in exports of Clothing in Vietnam during 2005 was less at 8% as compared to year 2003 when it was 32% and 28% in the year 2004.

The table below reveals the exports of RMG from India, China & Vietnam in the pre MFA & post MFA period along with the growth rates.

Exports of RMG By China, India and Vietnam During 2002-2005

• China's exports of RMG (under HS Code 61+62) have grown exponentially over the years at a CAGR of 24.7% over the 5 year period.
• India's Global Exports of RMG is marginally higher than Bangladesh Global exports of RMG.
• Though China & India have emerged as major competitor in RMG segment, share of Vietnam in World Exports in the year 2005 was 1.76%. India will now have to face competition from neighboring countries in South Asian region in the RMG segment.
• Vietnam ranked 12th as a major exporting country for RMG in the year 2005.  India was at 6th position.  
• RMG constituted 14.20% share in Vietnam's Total Exports in the year 2005.