Supporting industries seek further support

Supporting industry enterprises in difficulties

A report from the Ministry of Industry and Trade (MoIT) shows that Vietnamese supporting industry enterprises have improved productivity and production efficiency, and become direct suppliers of final assemblers and multinational corporations, participated in regional and global production networks and value chains.

FDI projects in the industrial sector that use large amount of domestically produced raw materials and components will be prioritized

As the supporting industry has gradually developed, the localization rate has increased in many industries, such as the textile, garment and footwear industry by 45 to 50 percent, mechanical manufacturing by more than 30 percent. However, the MoIT recognized that support policies for the supporting industry, especially in processing of agricultural, forestry and fishery products, and in agricultural and rural development still show limitations.

For example, the dissemination of policies has yet to be implemented regularly and on a large scale, while the production capacity of Vietnamese enterprises has not met requirements to enjoy preferential policies. Some conditions to enjoy incentives are quite strict and not really suitable in practices.

A part of supporting industry enterprises are not interested in support policies. Many of them lack specialized departments to study preferential policies due to limited resources.

Removing obstacles in policies

In the context of complicated geopolitical conflicts, Vietnamese businesses must pay attention to frontier markets, such as ASEAN, China, India, etc. to reduce potential supply chain disruptions. In particular, a policy like a Law on Domestic Supporting Industries to connect domestic industry with the development of the foreign investment sector needs to come into being soon to help domestic enterprises develop more sustainably.

For its part, the MoIT proposed that the State renew policies to attract foreign investment, focusing on attracting FDI in specific areas of the industrial sector instead of attracting spread investment.

A leader of the MoIT’s Vietnam Industry Agency said, “Regarding encouragement and selection of FDI projects in the industrial sector, priorities will be given to projects that use large amount of domestically produced raw materials and components, with a commitment to technology transfer and on-site human resource training; or to investors cooperating with domestic enterprises to form joint ventures; or multinational companies with international brands and high competitiveness, and foreign enterprises participating in the field of supporting industry.”