Vietnam targets higher local content to sustain export gains

KUALA LUMPUR, 24 JULY 2026 —

Vietnam’s Ministry of Industry and Trade (MoIT) plans to raise domestic manufacturing capacity to sustain export growth, said Nguyen Anh Son, director of the Agency for Foreign Trade.

Exports climbed more than 20% in the first half, driven by electronics, machinery, garments, wooden furniture and farm produce, according to MoIT data.

Nearly 88% of imports were machinery, equipment, raw materials and components, indicating firms are scaling up production ahead of new orders, Son told reporters.

To cut the trade deficit, Vietnam must expand local supply chains and lift localisation rates rather than rely on processing and assembly, MoIT said in a statement.

Electronics and agricultural shipments will remain the main engines in the second half, with global demand for AI, data-centre gear and farm commodities improving.

Big-tech manufacturers are accelerating investments in Vietnam, supercharging demand for imported machinery, equipment and spare parts, analysts said.

Do Thi Thuy Huong, board member of the Vietnam Electronic Industries Association, said AI and data-centre related goods still face demand, locking in orders through the third and fourth quarters.

Ngo Sy Hoai, vice chairman of the Vietnam Timber and Forest Products Association, expects wood exports to benefit from recovering consumer demand and stronger market diversification.

Tran Thanh Hai, AFT deputy director, said the priority is building a domestic production base, expanding raw material sources and meeting rules of origin to extract more from free trade agreements.

MoIT will step up trade promotion, diversify markets and help companies meet stricter green-output and traceability rules, Tran added.

Looking ahead, Nguyen Anh Son expects logistics costs to ease and raw material supplies to stabilise, keeping export growth above 15% and pushing total trade turnover to US$1 trillion this year.

The MoIT will accelerate digitalisation, strengthen market forecasting and expand export markets under guidance from Le Manh Hung, the trade minister.