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Experts wary over dependence on imports for garment production

25 Aug '11
2 min read

Experts have raised concerns over Vietnam's rising dependence on product and material imports from other countries, particularly China.

Besides being dependent on Singapore for its oil and petrol, Vietnam imports machinery, electronic parts, fertilisers, and other inputs for leather, garment, footwear, and textile production in bulk from China.

Vietnam's imports from China grew sharply during the initial six months of the current year, causing Vietnam's trade deficit with China to rise, according to the General Department of Customs.

During the January-June 2011 period, the country brought in a total of six billion USD worth of raw inputs for textile, garment, leather and footwear production, of which materials worth two billion USD were imported from China.

Vietnam imported 70 percent of the required raw inputs for domestic textile and garment industry. About 20 percent of these were imported from Indonesia, Thailand and India. Just 30 percent of the overall material required for production was produced within the country.

The export value of textile and garment industry rose by 30 percent during the current year. However, owing to high import cost of cloth, the export value actually grew by only 10 percent.

Experts opine that the local producers could earn a higher export value if they produce goods solely while using domestic raw materials.

The prices of the goods that the country imported from China have gone up by 40 percent since beginning of the current year over the end part of the last year. Thus, a sudden rise in import cost holds to be the biggest risk involved in importing raw material from China, experts say.

Fibre2fashion News Desk - India

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