FOREIGN TRADE UNIVERSITY

SCHOOL OF BUSINESS AND INTERNATIONAL BUSINESS

REPORT OF IMPORT BUSINESS PROCESS ANALYSIS

CASE OF VIETNAM’S TEXTILE FABRIC

GROUP: 4

Class Code : TMAE302(GD2-HK2-2022).2

Lecturer : Dr. Phan Thi Thu Hien

Hanoi, June 2022

 GROUP MEMBER

Name Student ID

Nguyễn Phương Hoa 2012150034

Nguyễn Tuấn Minh 2013150034

Nguyễn Trần Phương Hà 2012150028

Hoàng Xuân Đạt 2013150010

Nguyễn Thị Hải Hà 2012150026

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 Table of Contents
Table of Contents 3

I. Introduction 3

II. Overview of Vietnam’s textile fabrics importation 3

1. Trade statistics for Vietnam’s textile fabrics importation 3

2. Staple commodity and mode of transaction 4

III. Sales Contract 5

IV. Textile fabrics import process of the Vietnamese traders 10

1. Process information 10

2. Import procedure 12

2.1 PROCESS AREA 1: BUY 12

2.2 PROCESS AREA 2: PAY 13

2.3 PROCESS AREA 3: SHIP 13

2.4 Claim and dispute resolution (if any) 15

V. Bottlenecks & Recommendations 15

VI. Impacts of COVID 19 pandemic on the textiles import performance of

Vietnamese businesses 17

VII. Conclusion 18

VIII. Reference 19

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 I. Introduction
Vietnam's textile fabrics industry has always been an important aspect which
remarkably contributes to the nation’s economy. Vietnam has also proved its position
in the world’s textile and garment chain. In order to maintain that, textile importation
must be carried out following the regulations of global transactions. Therefore, we
decided to conduct a comprehensive analysis to better understand the business
processes of importing fabrics into Vietnam.

In our analysis, we concentrate on the process of importing textile fabrics. Starting

with presenting a brief overview of Vietnam textile fabrics importation and
opportunities/challenges for textile importation, we will go into details on Sales
Contract with three stages: buy, ship, and pay; then point out bottlenecks as well as
difficulties then make recommendations on improvements of textile import process in
Vietnam, especially in the context of COVID-19 pandemic.

II. Overview of Vietnam’s textile fabrics importation

1. Trade statistics for Vietnam’s textile fabrics importation
According to preliminary statistics of the General Department of Customs, the import
turnover of textile fabrics into Vietnam in the first 7 months of 2021 reached nearly
US$8.52 billion, up 30.4% over the same period in 2020. Specifically, in July 2021
alone, imports of textile fabrics reached nearly 1.23 billion USD, down 11.5%
compared to June 2021 but up 20.9% compared to July 2020.

Countr July 2021 Compar Compar First 7 Compar Percenta

y ed with ed with months in ed with ge
June July 2021 same
(%)
2021 (%) 2020 (%) period
in 2020
(%)

Total 1.228.885.9 8.519.344.3

-11,49 20,9 30,38 100
Import 43 83

801.196.80 5.388.014.9
China -10,88 20,29 36,25 63,24
9 14

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 157.156.74 1.067.512.0
Korea -4,72 10,39 15,87 12,53
9 61

128.389.99 1.027.045.4
Taiwan -21,72 39,27 33,25 12,06
7 89

384.984.76
Japan 56.915.980 -6,31 14,08 -1,85 4,52
4

                                                                                           Source: World Data Bank

According to the General Department of Customs, 63.2% of garment fabrics imported

to Vietnam come from China. In July 2021 alone, imports from this market reached
nearly $801.2 million, down 10.9% compared to June 2021 but up 20.3% compared
to July 2020.

Following is the Korean market with nearly 1.07 billion USD, up 15.9%, accounting
for 12.5%. Particularly in July 2021, it reached 157.2 million USD, down 4.7%
compared to June 2021 but up 10.4% compared to July 2020.

Imports from the Taiwan market continued to decrease in July 2021, down 21.7%
compared to June 2021 but up 32.3% compared to July 2020, reaching 128.39
million USD.

Fabrics imported from Japan in 7 months decreased by 1.9%, reaching 384.98

million USD, accounting for 4.5%.

2. Staple commodity and mode of transaction

Vietnam's textile and garment industry has not yet actively created a source of
high-quality raw materials in the country suitable for the production requirements of
export products, but depends heavily on imports (about 60-70%). The textile industry
mainly imports raw materials and accessories from China, Taiwan and Korea.
Vietnam's textile and garment industry currently has to import 90% of raw cotton,
100% of the demand for synthetic fibers, 50% of the demand for cotton yarn and 80%
of wide-format fabrics.

Direct trading is one of the most commonly used international methods and this can
be considered as the dominant trading method of Vietnam textile importers.
Furthermore, the sensitivity to external influences and the quality of textile products
requires strict compliance with all the conditions and rules for the means of transport,

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 including special packaging, labeling, etc. FCA Incoterms 2020 is considered to be
the most common means of transport for textiles.

III. Sales Contract

CONTRACT FOR THE IMPORTING OF

TEXTILE FABRICS 4.8. Currency Code, Amount: 

Currency: USD (US DOLLAR)

No. IM.1111/DA-DE
Amount: USD 78,000

Date: 10/05/2022
4.9. L/C opening date: Within 07 days after the

PARTIES  contract date, the Buyer must send the draft

L/C to the Seller

A. SELLER
4.10. Period for document presentation:
Seller name: Wujiang Yinlong Textile &
Within 21 days after the date of shipment, but in
Leather Co., Ltd.
any event not later than the expiry date of the
Legal from: Limited Liability Company credit. 
Country of  incorporation and trade register
number: China 4.11. L/C validity: within 60 days from L/C

Address: Xihuan road, Suzhou, Jiangsu, opening date.

China
4.12. Required documents:
Phone: 86-0512-63500792
Represented by: Ms. Emily Lee • Bill of exchange;
Occupation: Sales Representative
• Full set (3/3) of original clean shipped on
board ocean Bill of Lading showing

B. BUYER
L/C number, consigned to the order of
Buyer name: Tumi Commercial Co., Ltd.
Vietcombank Thanh Cong brand, Hanoi,
Legal from: Limited Liability Company Vietnam marked “SHIPPED ON BOARD” and
Country of  incorporation and trade register notifying the Applicant with full address;
number: 
Address: C6 Tran Huu Duc Road, Nam Tu • Signed commercial invoice in triplicate;
Liem, Ha Noi, Vietnam
• Quality and Quantity Certificate issued by
Phone: 0356536479
manufacturer in triplicate;
Represented by: Nguyen Tuan Minh

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Occupation: Sales Representative
• Certificate of Origin issued by Chamber of
Commerce and Industry of China in triplicate;
Here in after: "the Parties" 

• Detailed Packing List in triplicate;

SPECIFIC CONDITION 
• Beneficiary’s certificate certifying that one set
ARTICLE 1 - COMMODITY 
of non negotiable documents has been sent by
fax to the Applicant within 05 days after
1.1. Subject to the terms agreed in this
shipment date;
contract,  the Seller shall deliver the
following good(s)  (hereinafter: "the
• Proof of sending shipping documents in
Goods") to the Buyer. 
copies to the Buyer/ Consignee.

1.2. Description of the Goods: 

• One extra copy of N/N invoice and transport
1.2.1. Product name: Virgin Wool Fabrics
document required for issuing bank’s file.
Wujiang Yinlong Textile & Leather
1.2.2. Classification: Woven fabric
1.2.3. HS code: 5112110010 ARTICLE 5 - CANCELLATION DATE

1.2.4. Country of origin: China

If the goods are not delivered for any reason

1.3. Quality of the Goods:  whatsoever (including force majeure) by June

1.3.1 Composition: 95% Virgin Wool + 5% 17, 2022, the Buyer will be entitled to CANCEL

polyester. Non metallic dyestuffs THE CONTRACT IMMEDIATELY BY

NOTIFICATION TO THE SELLER.
1.3.2 Width: 140 cm minimum
1.3.3 Abrasion Resistance: Heavy duty / 10
year guarantee. Independently certified to
ARTICLE 6 - NON-CONFORMITY
≥50,000 Martindale cycles
1.3.4 Flammability: 6.1 The Buyer shall examine the Goods, or
● EN 1021 - 1&2 (cigarette & match) cause them to be examined within as short a
● BS 7176 Low Hazard period as is practicable in the circumstances.
● NFD 60-013 The Buyer shall notify the Seller of any lack of
● ÖNORM B 3825 & A 3800-1 conformity of the Goods, specifying the nature
(58kg/m3 CMHR Foam) of the lack of conformity, within 03 days after
● UNI 9175 Classe 1 IM the Buyer has discovered or ought to have
● BS 476 Part 7 Class 1 (Adhered) discovered the lack of conformity. In any event,
● EN 13501-1 Adhered Class D, s1, d0 the Buyer loses the right to rely on a lack of
conformity if he fails to notify the Seller thereof

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 ● BS 5852 Ignition Source 5 when FR at the latest within a period of two years from
treated the date on which the Goods were actually
● BS 7176 Medium Hazard when FR handed over to the Buyer.
treated
● BS 476 Part 6 Class 0 when FR 6.2 Where the Buyer has given due notice of

treated (Adhered) non- conformity to the Seller, the Buyer may at

● EN 13501-1 Adhered Class B, s1, d0 his option:

when FR treated
6.2.1 Require the Seller to deliver any missing
● EN 13501-1 Un-adhered Class D, s2,
quantity of the Goods, without any additional
d0 when FR treated
expense to the Buyer;
● BS 5867-2 Type B Curtains & Drapes
when FR treated 6.2.2 Require the Seller to replace the Goods
● The Furniture and Furnishing (Fire) with conforming goods, without any additional
(Safety) Regulations 1988 (Domestic expense to the Buyer;
Cigarette and Match)
● IMO FTP Code (Part 8) 6.2.3 Require the Seller to repair the Goods,

1.3.5 Flexes: Heavy duty / 5 year guarantee without any additional expense to the Buyer;

>100,000 (EN ISO 5402).

6.2.4 Reduce the price in the same proportion
1.3.6 Light Fastness: 5 (ISO 105 - B02)
as the value that the Goods actually delivered
1.3.7 Fastness to Rubbing: Wet: 4, Dry: 4
had at the time of the delivery bears the value
(ISO 105 - X12)
that conforming goods would have had at that
time. The Buyer may not reduce the price if the
Seller replaces the Goods with conforming
1.4. Quantity of the Goods: 
goods or repairs the Goods in accordance with
1.4.1 Total quantity: 1200kg paragraph 3.2.2 and 3.2.3 of this Article or if the
100g/m^2 x 12000 m^2 fabrics  Buyer refuses to accept such performance by
the Seller.

ARTICLE 2 – PRICE 
ARTICLE 7 – FORCE MAJEURE – EXCUSE
2.1. Currency: USD 
FOR

2.2. Unit price: 6.5 USD/m2/ FCA Hai Phong

NON - PERFORMANCE
Port 
7.1 “Force majeure” means war, emergency,
accident, fire, earthquake, flood, storm,
2.3. Total price: 
industrial strike or other impediment which the

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 affected party proves was beyond its control
Amount in numbers: USD 78,000 USD and that it could not reasonably be expected to
have taken the impediment into account at the
Amount in letters: Seventy eight thousands
time of the conclusion of this contract or to have
US dollars
avoided or overcome it or its consequences.

7.2 A party affected by force majeure shall not

ARTICLE 3 – DELIVERY  be deemed to be in breach of this contract, or
otherwise be liable to the other, by reason of
3.1. Delivery term: FCA
any delay in performance, or the
Shanghai, Incoterms 2020 
non-performance, of any of its obligations under
this contract to the extent that the delay or
3.2. Port of Shipment: Shanghai Port, China
non-performance is due to any force majeure of
3.3. Named Port of destination:  Hai Phong which it has notified the other party in
Port, Vietnam accordance with Article 9.3. The time for
performance of that obligation shall be
3.4. Date or period of delivery: June 10, extended accordingly, subject to Article 9.4.
2022  - June 17, 2022 
7.3 If any force majeure occurs in relation to
3.5. Time of shipment: 30 days  either party which affects or is likely to affect the
performance of any of its obligations under this
3.6. Carrier: ZIM Integrated Shipping , Le contract, it shall notify the other party within a
Hong  Phong Street, Ngo Quyen District, Lot reasonable time as to the nature and extent of
20A TD  Business Center - TD Plaza / Room the circumstances in question and their effect
716, Hai Phong,  Vietnam  on its ability to perform.

3.7. Note of shipment: 7.4 If the performance by either party of any of

The seller must immediately notify the buyer its obligations under this contract is prevented
when the goods are ready for delivery. or delayed by force majeure for a continuous
period in excess of three months, the other
Within 24 hours after finishing the shipment, party shall be entitled to terminate this contract
the Seller must inform the Buyer of the by giving written notice to the Party affected by
details of the shipment, including date of the force majeure.
delivery, quantity, and quality of the Goods,
containers, estimated time of departure, and ARTICLE 8 - RESOLUTION OF DISPUTE
estimated time of arrival which is sent by fax
Any discrepancies and/or disputes arising out
first and confirmed in written documents.
or in connection with this contract not settled

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 amicably shall be referred to Arbitration
3.8. Required documents: accordance with the Rules and Practices of the
International Chamber of Commerce in Paris or
- 3/3 Original of signed commercial invoice
such other place agreed by both sides
- 3/3 Original Packing List
ARTICLE 9 - APPLICABLE LAW
- 1 Original and 1 Copy of Forwarder Cargo
Questions relating to this contract that are not
Receipt (FCR)
settled by the provisions contained in the
ARTICLE 4 - PAYMENT contract itself shall be governed by the United
Nations Convention on Contracts for the
4.1. Means of payment: Irrevocable, at sight International Sale of Goods (Vienna Sales
L/C: Unconfirmed Convention of 1980, hereafter referred to as
CISG).
4.2. Applicant:
Made in Hanoi, on May 10, 2022
Address: C6 Tran Huu Duc Road, Nam Tu
Liem, Ha Noi, Vietnam

Tel: 0356536479 For the Seller For the Buyer

4.3. Beneficiary: Wujiang Yinlong Textile & Sales Representative Sales Representative

Leather Co., Ltd.

(signed/sealed) (signed/sealed)

Address: Xihuan road, Suzhou, Jiangsu,

China
Mr. Emily Lee Nguyen Tuan Minh

Tel: 86-0512-63500792

4.4. Place of Issue: Vietcombank Thanh

Cong brand, Hanoi, Vietnam

4.5. Place of Confirming: Commercial bank

of China, HeadQuarter

4.6. Partial shipment: NOT ALLOWED

4.7. Transhipment: NOT ALLOWED

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 IV. Textile fabrics import process of the Vietnamese traders
1. Process information
● Exporter: Wujiang Yinlong Textile & Leather Co., Ltd.
● Importer: Tumi Commercial Co., Ltd.
● Main product: Virgin wool - HS code: 51121100
● Carrier: Sea port
● Sales channel: online transaction => transporting by sea
● Customs Duties on importing fabrics ( Virgin wool) in Vietnam: 
● Tariff applied on this product is 12% 
● However, Vietnam has preferential tariff for China => Chinese exporter
can benefit from 0% tax following trade agreement details
● Governmental management on importing Virgin Wool from China to
Vietnam:
❖ Standards and regulations 
The Ministry of Industry and Trade (MOIT) Circular No. 21/2017/TT-BCT sets limits
on the content of formaldehyde and certain azo dyes in textile products. Under this
regulation, formaldehyde and azo dye content in textile products that are
manufactured, imported, distributed or sold in the Vietnam market will be limited as
follows:
Limits on content of formaldehyde:
• textile products for children under 3 years old: 30 mg/kg
• textile products in direct skin contact: 75 mg/kg
• textile products without direct skin contact: 300 mg/kg

Limits on content of aromatic amines derived from azo colorants: 

• aromatic amine shall not exceed 30 mg/kg 

Effective January 1, 2019, all textile products must comply with the National
Technical Regulation regarding the contents of formaldehyde and aromatic amines
derived from azo colorants. At the point of sale, products must have a regulation
conformity (CR) mark indicating conformance either by self-declaration or by the
appointed certifying organization.
❖ Labeling Requirements
Decree 89/2006/ND-CP and accompanying regulations provide the requirements for
the labeling of goods for sale in Vietnam. According to these regulations, product
labels must include the following information: 
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 • Name of goods 
• Name and address of the organization or individual responsible for the
goods 
• Origin of goods 
In addition, garment products must also include the following information: 
• Composition or quantitative compositions 
• Technical specifications 
• Hygiene, safety information and warnings 
• Instructions on use and preservation

● Required documents for Customs procedures – Import regulations:

❖ Bill of lading;
❖ Import goods declaration form
❖ Certificate of origin;
❖ Cargo release order;
❖ Commercial invoice;
❖ Customs import declaration form;
❖ Inspection report;
❖ Packing list;
❖ Delivery Order 
❖ Technical standard/health certificate
❖ Terminal handling receipts.
● Related forms and documents:

❖ Customs declaration procedures for import shipments

Custom declaration form of imported goods according to the information specified in
Appendix II of Circular 38/2015/TT-BTC
▪ Import license for fabrics requiring an import license.
▪ The inspection exemption notice or the inspection report notice issued by the
specialized inspection agency as prescribed by law.
▪ Certificate of origin issued by the exporter’s competent authority
▪ Purchase and sale contract.
▪ Bill of lading.
▪ Set of bank documents: invoice, sales declaration, quality certificate customs
value declaration

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 ❖ Documents related to letter of credit
▪ Bill of exchange drawn against the issuing bank.
▪ Signed commercial invoices.
▪ Bill of lading.
▪ Certificate of origin issued by the exporter’s competent authority

2. Import procedure
2.1 PROCESS AREA 1: BUY
2.1.1 Market Research

2.1.1.1 The importer/buyer does research on main characteristics of the commodity

The most important characteristic of virgin wool is its purity of lamb’s first shearing
wool, as a result, it requires strict preservation standards during transportation. 

2.1.1.2 The importer/buyer looks for prospective trading partners all over the world
using the website trademap.org developed by ITC

2.1.1.3 The importer/buyer calculates the import foreign exchange rate using the
formula: 

Xi = Li / Fi (Li: Turnover of domestic consumption; Fi: Import cost in foreign currency)

2.1.2 Contract conclusion

2.1.2.1 The buyer calculates the effective amount order based on four variables:
annual ordered demand, order amount, order cost, average warehouse cost.

2.1.2.2 The buyer prepares an inquiry to send the seller via email or any other
convenient means of communication. The seller receives and sends back a
quotation.

2.1.2.3 The buyer reviews the quotation on price and sales terms from the seller and
evaluates if the quoted price and sales terms are acceptable.

2.1.2.4 The buyer receives Proforma Invoice from the seller.

2.1.2.5 The two parties carefully discussed and agreed on Payment terms as follows:
Payment shall be made by an irrevocable, at sight L/C in US dollars for 100% total
value of the Contract in favor of the Seller. L/C shall be issued through a reputable

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bank in Vietnam. L/C shall be issued at least 15 days before the shipment and 60
days invalidity.

2.2 PROCESS AREA 2: PAY

2.2.1 Asking for L/C issuance

The buyer prepares the necessary document to fill in the application to open a Letter
of Credit (L/C) at the issuing Bank, through which the buyer's bank commits to pay
the value of the goods to the seller through the seller's bank. The buyer is
responsible for the L/C fee.

2.2.2 Claiming payments of the goods 

After receiving the L/C, the seller will deliver the goods in accordance with the
Contract and send to the issuing bank a set of documents to prove that the sale
obligation has been fulfilled.

The issuing bank proceeds to disclose all documents with the buyer and with the
approval of all documents brought in order as per the buyer’s information.Then, the
buyer makes the payment to the issuing bank, which in turn forwards the payment to
the negotiating bank.

2.3 PROCESS AREA 3: SHIP

2.3.1 Arranging transportation

The import company signs a service contract with a shipping company. The carrier is
responsible for receiving the goods from the seller and at the seller's premises, the
seller loads the goods onto the carrier.

2.3.2 Pre-shipment inspection

The importer requires independent agencies to inspect the goods, mainly on price,
quality and quantity before shipment.The inspection should be done at seller's
warehouse before the goods are handed over to the carrier

2.3.3 Obtaining cargo insurance

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The importer buys a cargo premium to cover goods against damage or loss while in
transit.The insurance for the goods should be done before they are handed over to
the carrier.

2.3.4 Customs clearance

Before receiving the goods, the company’s employees carry out customs procedures
including Customs declaration and submission of goods documents. After completing
the customs dossier, the company will submit the declaration to the customs office
along with the necessary documents to prove the legitimacy of the shipment.

2.3.5 Taking delivery of import/ discharge the import

Before the goods arrive in Vietnam, there will be an Arrival Notice informing the
shipment details as well as the time and place where the goods will arrive, and the
request that the buyer comes to receive the goods.

Bringing the necessary documents to the carrier to receive the delivery order
(Delivery Order – D/O). Once the buyer has the D/O in hand, the buyer brings it
along with other documents such as the Contract, Invoice, Packing List, Certificate of
Origin, etc. to meet the Customs and open the Customs Declaration. These
documents will be sent to the buyer by the seller (directly or via the bank) before the
goods arrive so that the buyer can check and notify the adjustment if errors are
detected in the documents.

After opening the Customs Declaration, Customs will conduct an inspection of the
goods to see if they are correct in the Contract, Invoice, Packing List as well as C/O,
if true, the buyer can release the goods and transport them to the buyer’s warehouse,
depending on the item, prepare to pay tax immediately or pay tax after a certain
period of time.

2.3.6 Inspection

Before or when the goods arrive at the border gate, the owner of the goods shall
submit an inspection registration dossier at the inspection agency or the National
Single Window website. COR and ROROC should be checked while discharging,
before taking a closer inspection.

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After discharging, the inspector does a cargo inspection . Usually, the main content
that the company checks is on quality, quantity, packaging... to ensure compliance
with the contract. Check the quality of 5% of the packages randomly. 

2.4 Claim and dispute resolution (if any)

During the implementation of import contracts, companies cannot avoid errors such
as late payment, non-payment, or failure to perform or perform improperly or fully an
obligation specified in the contract. When such a case occurs, the companies should
promptly resolve and adjust, mediate, negotiate, and settle, without any dispute.
Otherwise, legal proceedings stated in Article 8 in the contract will be applied.
Systematization charts

BPA diagram of Importing Virgin wool to Vietnam

V. Bottlenecks & Recommendations

1. Bottlenecks & Redundancies identification

Customs Procedures

According to the Assessment of the General Department of Customs, the average

time it took to prepare import documents was 27.63 hours, down 28.05 hours from
2019 results. As a result, the average cost of preparing import documents was

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$98.94, decreasing $60.76 compared to 2019. However, compared to other steps,
custom clearance is still significantly longer, which will cause the whole process to be
delayed, costing more time and resources.

Transportation to the buyer’s warehouse/area

Hai Phong seaport has abundant sources of goods, accounting for more than half of
the total cargo volume of the area, but many traffic congestion points, but many traffic
congestion points, management mechanisms make the ports still not optimized for
use.

Roads are still the dominant mode of transport for the withdrawal of goods from the
port (accounting for 50%) causing the phenomenon of road congestion after the port
to occur regularly, especially in the port area of Ve Temple, Dinh Vu.

In addition, the policy mechanism also has many shortcomings, especially in the
maintenance of maritime infrastructure and administrative procedures reform.
Specifically, the flow route into the ports of Hai Phong area is a one-way flow line,
although the design standard is guaranteed but due to the large traffic density, the
ships still have to anchor to wait for their turns, affecting the quality of goods and the
efficiency of the operation of the wharves in the Cam River area, Dinh Vu.

2. Recommendations

Customs Procedures

Where possible, digitalization and simplification of import export and transit

procedures (e.g. paperless trade) should be accelerated. Trade facilitation measures
included designing “green lanes” for streamlining border controls or exchanging
specific trade documents electronically.

Transportation to the buyer’s warehouse/area

● Local governments need to invest more in improving the infrastructure

❖ Prioritize investment in inland waterway ports on Corridor No. 1 (Quang Ninh -
Hai Phong - Viet Tri) such as: Phu Dong, Que Vo... to serve the exploitation
and increase the capacity of releasing goods by inland waterway.
❖ Studying, building frontage roads and intersections at the exits of ports and
warehouses in Dinh Vu and Cat Hai areas to reduce traffic congestion.

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 ❖ Accelerate the construction of a coastal road connecting Hai Phong with Thai
Binh, Nam Dinh and Thanh Hoa to shorten the transport route from Dinh Vu to
the southern provinces.
● Simplify and reform relating procedures

VI. Impacts of COVID 19 pandemic on the textiles import performance of

Vietnamese businesses

With a supply chain that heavily relies on a few key partners, Vietnam’s garment and
textile industry is among the country’s most brutal hit by the COVID-19 pandemic.

Import value of textile fabrics in Vietnam from 2010 to 2020 (in million U.S.
dollars)

According to the Vietnam Textile and Apparel Association (VITAS), the total import
value of garments and textiles in the first four months of 2020 was US$6.39 billion,
down 8.76 percent compared to the same period last year. By June 2020, the
estimated loss to the industry could reach US$508 million. Data from Vietnam’s
Customs Agency suggests that imports of all textile and garment products fell
massively in the first quarter of 2020.

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Vietnam has traditionally focused on garment production with little capacity for fabric
manufacturing. It is estimated that 60% of the materials used in Vietnam's garment
industry were imported from China. When the coronavirus pandemic struck in
January, Chinese fabric manufacturers suspended production, disrupting the supply
of fabrics to Vietnam. As the pandemic center shifted west from China in March,
many orders from the European Union and the United States were canceled, causing
significant damage to Vietnam’s garment manufacturers. Saigon Garment 3 JSC, a
manufacturer for Uniqlo and Nike, has enough raw materials to maintain production
until March. These difficulties were direct outcomes of the Covid-19 outbreak. In
order to prevent the disease from spreading out, Vietnam had to close some border
gates to China and limit trade between China and Vietnam to a specific volume.
Difficulties in trade and transportation together with the commodity scarcity due to the
moderate production in China caused supply disruption - a conundrum for Vietnam’s
textile and garment manufacturers. Several textile and garment enterprises had to
reduce working hours to be able to maintain working time for the workers. Especially
for small enterprises, raw materials can only serve production till the end of February
and if the current situation continues to occur, a lot of enterprises will probably shut at
the beginning of March.

According to Mr.Tran Thanh Hai - Deputy Director General of Import and Export
Department, the impact of Covid-19 on Vietnam's textile and garment industry cannot
be stopped, even when the disease is over. Vietnam Textile and Apparel Association
(VITAS) said that some textile and garment or leather and footwear enterprises are
considering importing raw materials from other countries such as Korea, India,
Bangladesh, and Brazil... to offset the shortage of raw materials for production but
the above plans are just short-term solutions.

VII. Conclusion

Vietnam's textile industry has been developing strongly and plays an increasingly
important role in the economic growth of the country. This industry also has a great
impact on Vietnam's socio-economic development. Thanks to this report, we can see
each step and method of importing textiles products to Vietnam in greater detail.
Efforts should also be directed toward identifying new import markets through
collaboration with Vietnamese chambers of commerce in other countries. Due to the
heavy influence of the Covid-19 pandemic, Vietnam's textile t makers have to face a

18
variety of challenges when it comes to importing, including a lack of time,
long-distance transportation, and a plethora of paperwork and customs processes.
Businesses must invest in technological development, supply chain management,
and suitable solutions to reduce bottlenecks and challenges in the process. However,
the textile industry of Vietnam is still striving to achieve the nation's target in the
future. In order to accomplish the aforementioned goal, the government must
undoubtedly make changes to stabilize, restructure, and diversify markets toward
various import markets, particularly its domestic market. Moreover, to make the
import process faster and easier, the government could also boost support for
enterprises, cut import taxes, avoid superfluous administrative procedures, and pay
more attention to transportation development.

VIII. Reference

1. General Department of Vietnam Customs

2. ITC Trademap, Macmap

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