Business

Processing, manufacturing sector continues to attract FDI flows

Newly registered FDI reached 10.03 billion USD in the first seven months of 2025, of which 5.61 billion USD, or 55.9%, flowed into processing and manufacturing.

Production of footwear materials at an FDI company (Photo: VNA)
Production of footwear materials at an FDI company (Photo: VNA)

Hanoi (VNA) – Vietnam’s processing and manufacturing industry remained the leading magnet for foreign direct investment (FDI) in the first seven months of 2025, according to Nguyen Van Toan, Vice Chairman of the Vietnam Association of Foreign-Invested Enterprises.

Newly registered FDI reached 10.03 billion USD during the period, of which 5.61 billion USD, or 55.9%, flowed into processing and manufacturing.

Overall, including newly registered capital, additional investment and share purchases, the sector drew 13.72 billion USD, accounting for nearly 57% of total FDI inflows.

The industry also dominated FDI disbursement, with 11.1 billion USD, or 81.6% of the 13.6 billion USD disbursed nationwide – the highest seven-month level in five years.

Toan noted that Vietnam’s competitive labour costs, favourable geographic location, participation in new-generation free trade agreements, and the development of industrial clusters underpin this appeal. The country’s deeper integration into global supply chains, particularly in electronics and components, has also reinforced investor confidence.

He emphasised that strong FDI inflows into processing and manufacturing will expand production capacity, boost exports, create jobs and contribute significantly to GDP growth.

In the longer term, sustaining momentum while improving localisation rates could support Vietnam’s target of double-digit growth in 2026–2030, reducing reliance on contract manufacturing and enhancing its position in global value chains.

However, Toan cautioned that Vietnam should focus not only on the quantity but also the quality of FDI, prioritising high-tech, environmentally friendly projects, and those with commitments to technology transfer to domestic firms.

According to the Foreign Investment Agency under the Ministry of Finance, total foreign investment into Vietnam reached 24.09 billion USD in the first seven months, up 27.3% year on year. This included 2,254 new projects worth 10.03 billion USD, 920 projects with increased capital totalling 9.99 billion USD, and 1,982 cases of capital contributions and share purchases worth 4.07 billion USD./.

VNA
#processing and manufacturing industry #FDI #labour costs #free trade agreements #foreign investment
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