India eyes $ 300 mln garment-textile industrial park near Ho Chi Minh City

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India eyes $ 300 mln garment-textile industrial park near Ho Chi Minh City

India is planning to establish a US$ 300 million industrial park specialising in garment and textile material production near the southern Vietnamese economic hub of Ho Chi Minh City, local media quoted a senior leader of the Synthetic and Rayon Textiles Export Promotion Council of India (SRTEPC) as saying earlier this month.

"It is the efforts of Indian companies to take the initiative of the Trans-Pacific Partnership [TPP] trade deal which will offer a boost to the local garment and textile industry,” Vinod K. Ladia, chairman of the SRTEPC, said at the Indian Textile Exhibition 2015 (Intexpo) at the Tan Binh Exhibition and Convention Center in Tan Binh District, Ho Chi Minh City. According to Ladia, the new industrial park will focus on producing products related to textile and fabric materials.

It will also accommodate manufacturers making products for large orders for Indian exports to Vietnam in the fields of healthcare, household appliances, and furniture. "These high value-added products cannot be manufactured in Vietnam now. As a result, instead of importing from India with high taxes, now we will open our production bases in Vietnam to reduce costs," Ladia said.

Although Vietnam is one of the leading countries in exporting garments, it is dependent on other nations – mostly China – for its textile input. The Southeast Asian country imported more than US$ 440 million worth of textile products from India during the financial year ending March 2014, with the main items being polyester viscose and synthetic fabric, polyester wool fabric, and polyester filament yarn. India’s exports of synthetic fibre to Vietnam went up from US$ 36 million in 2009 to US$ 89.09 million last year, an increase of 146%.

Meanwhile, India has a sufficient supply of materials for the Vietnamese textile industry, Ladia said, adding that the cooperation between India and Vietnam will bring mutual benefits: a new export market for India and an ample material supply for Vietnam. Vietnam also imports cotton from India. In 2014, cotton imports from India were valued at US$ 266.170 million, accounting for 18.5% of US$ 1.443 billion worth of cotton imports into the Southeast Asian nation.

With its large population, India is a potential export market for the Vietnamese garment industry, the SRTEPC chairman added. India is the world’s second largest manufacturer of cotton, silk, cotton cellulose, and fibres with approximately US$100 billion in revenue a year, of which US$ 40 billion was from exports, he said. However, the shipment of such high quality textile materials to Vietnam has faced a lot of hurdles due to the complicated payment mechanism and time-consuming shipping process, Ladia complained. But this will change soon with the coming TPP, he added.