Vietnam's textile and garment industry needs a reformed development model to keep export momentum, according to the Vietnam Textile and Apparel Association (VITAS), which says current growth relies too heavily on tariff advantages rather than competitiveness.

The industry body argues that preferential tariffs under the CPTPP and the EU-Vietnam Free Trade Agreement (EVFTA) have driven recent export gains, but this advantage will narrow over time. Vietnamese exporters face mounting pressure from higher wage costs, stricter environmental compliance rules and buyers shifting orders to lower-cost countries.

VITAS identifies several structural weaknesses. The domestic industry depends heavily on imported raw materials, with fabric and yarn inputs sourced mainly from China. Local value-added remains low because most Vietnamese producers work as cut-make-trim (CMT) subcontractors rather than building original design manufacturer (ODM) or original brand manufacturer (OBM) capability.

The association also points to labor shortages in industrial zones near Ho Chi Minh City and Hanoi, where garment factories struggle to retain skilled workers as wages rise faster than productivity. Energy costs and green compliance requirements from major buyers add further pressure on margins.

VITAS proposes a shift toward higher-value production, investment in automated cutting and sewing technology, and development of domestic fabric supply chains. The association also urges stronger links between Vietnamese manufacturers and foreign buyers seeking China-plus-one sourcing options.

Industry analysts note that Vietnam's garment exports compete directly with Bangladesh, India and Indonesia for the same order book. Without structural reform, Vietnamese factories risk losing market share as buyers diversify production bases across Southeast Asia.