Regional competition intensifies in South and Southeast Asia

These countries are not only modernising their industries and enhancing trade access but are also becoming preferred destinations for global investors—especially as supply chains shift away from China.

India’s initiatives

India is rapidly strengthening its textile and apparel sector through a mix of strategic infrastructure, policy incentives and global partnerships.

Central to this drive is the PM MITRA (Mega Integrated Textile Region and Apparel) Parks scheme announced in March 2023. With a total outlay of around $517 million, this will see the establishment of seven mega textile parks, with the latest approved in Virudhunagar, Tamil Nadu, at a cost of around $221 million. It will cover an area of 1,052 acres and is expected to attract over $1 billion in investment and generate 100,000 jobs by as early as 2026.

This development aligns with the broader ‘Make in India’ initiative. The textile and apparel sector accounts for 13 per cent of India’s industrial production, contributing 2.3 per cent to GDP and accounting for 7 per cent of India’s exports, with annual exports reaching $34.4 billion in 2023–24.

A key focus is on expanding the production of man-made fibres and technical textiles, backed by $2 billion Amended Technology Upgradation Fund Scheme (ATUFS), the $1.2 billion PLI (production-linked incentive) Scheme for Textiles and skilling initiatives under Samarth and the Textile Cluster Development Scheme (TCDS).

The government is also supporting innovation and sustainability through the $172 million National Technical Textiles Mission and startup collaborations in areas such as textile waste recycling and bio-based fibres. With India being a major cotton and silk producer, further efforts in branding and traceability via blockchain are being developed to enhance global competitiveness.

Backing for Bangladesh

Meanwhile, in a major strategic move, Bangladesh is developing two new economic zones exclusively for Chinese investors—the Chandpur Economic Zone-1 in Matlab North and the Bhola Eco-Development Economic Zone. These zones are being developed by PowerChina and Leez Fashion Industries Limited, respectively. The Bhola project alone is expected to draw up to $1.8 billion in investment and generate 40,000 jobs.

This trend is part of a broader push by Chinese companies seeking alternatives amid rising tariffs imposed on their goods by the US.

At the 2025 Bangladesh-China Trade Summit in Dhaka on June 1 this year, a major Chinese textile firm announced a $100 million investment in Bangladesh’s spinning sector. With the country now ranking as the fifth-largest yarn importer globally, it is steadily upgrading its textile infrastructure.

South Korean interest in Bangladesh is also growing, with firms such as Youngone Corporation planning new ventures in the country, particularly within the Korean Export Processing Zone (KEPZ) in Chittagong. With business-friendly reforms and streamlined policies introduced by the interim government, Bangladesh is reinforcing its appeal to foreign investors.

Subang Smartpolitan plan in Indonesia

Indonesia’s textile industry contributes 5.84 per cent to GDP and employs nearly four million people. The country is targeting a market size worth over $45 billion by 2030, up from $13 billion in 2023, supported by government initiatives and rising export demand.

One of the standout developments is the Subang Smartpolitan project in West Java, a smart industrial city with cutting-edge infrastructure tailored for textile manufacturing. PT Xinfung Industry Indonesia has invested $30 million in Subang to produce luxury sustainable yarns, creating 300 jobs.

To modernise outdated machinery and improve competitiveness, Indonesia is also rolling out a $1.2 billion machinery revitalisation programme. The government is also providing low-interest loans with an eight-year repayment plan and 5 per cent interest subsidy for labour-intensive sectors, including textiles.

Furthermore, Indonesia is fast-tracking the Indonesia-EU Comprehensive Economic Partnership Agreement (IEU-CEPA) to strengthen market access, especially amid global trade volatility. The deal, currently in advanced negotiation stages, will focus on trade liberalisation, regulatory alignment and investment promotion.

Pakistan attracting foreign investors

Pakistan’s textile sector, which contributes 8.5 per cent to GDP, accounts for 60 per cent of exports, and employs 40 per cent of the industrial workforce. With abundant raw materials, especially cotton, Pakistan’s vertically integrated textile supply chain is attracting fresh foreign interest.

Two Chinese companies—Rainbow Industries and Shaoxing Chemical Industry—have recently announced plans to set up textile plants in Pakistan. These joint ventures aim to localise the production of affordable raw materials, reduce import dependency and strengthen domestic manufacturing capabilities.

The Pakistani government is complementing foreign investment with energy subsidies, credit incentives and technology upgrade schemes.

Vietnam’s forward momentum

With textile and garment exports reaching $44 billion in 2024—a 9 per cent increase from the previous year—Vietnam is leveraging cost competitiveness and favourable trade agreements to stay ahead.

Key advantages include a skilled workforce, strong industrial infrastructure, and favourable trade agreements, which should help Vietnam maintain strong export momentum.

In addition, to build resilience and efficiency, the industry is investing in automation, robotics and digital systems. A national push towards renewable energy use and energy-saving technologies is also helping producers meet global environmental standards.

Vietnam is also working to strengthen domestic raw material supply chains and develop large-scale textile industrial zones, allowing it to better capitalise on tariff benefits from agreements like the EU-Vietnam Free Trade Agreement (EVFTA).

ALCHEMPro News Desk (CG)