A boost to the development of supporting industries.

Despite proactively opening its doors to various processing and manufacturing industries, the supporting industries have not yet fully developed their potential, facing numerous challenges related to markets, technology, human resources, and capital. Recognizing these inherent weaknesses, the government has enacted many new policies, creating a boost to promote the development of this industry.

Manufacturing machine components at the Precision Mechanics and Technology Transfer Company (Phu Nghia Industrial Park). Photo: Quang Thai

Lack of competitiveness

According to Pham Tuan Anh, Director of the Department of Industrial Safety and Environment ( Ministry of Industry and Trade ), the supporting industries have made positive progress in recent years thanks to the State's support and encouragement policies and the efforts of the business community. To date, there are approximately 5,000 supporting industry enterprises nationwide; their products are fully supplied domestically and exported to South Korea, Japan, China, the United States, etc., such as electrical cables, gearboxes, plastic components, and more.

Specifically, there are approximately 100 businesses that are Tier 1 suppliers to multinational corporations; the number of Tier 2 and Tier 3 suppliers is around 700. Notably, about 50 businesses are Tier 1 suppliers and 170 businesses are Tier 2 suppliers to Samsung Group.

However, despite the government's coordination with organizations and businesses to implement linkages between foreign-invested enterprises (FDI) and Vietnamese enterprises, these linkages remain weak; social resources have not been concentrated much on investing in supporting industries due to slow capital recovery times and less attractive profits compared to investments in other sectors.

According to Nguyen Van, Permanent Vice President of the Hanoi Association of Supporting Industries Enterprises (HANSIBA), although there are 900 enterprises participating in the supporting industry sector, the highest percentage in the country, this sector in Hanoi still has many limitations.

In particular, supporting industrial products are simple, with medium to low technological content, and have little value in the overall product value structure. The localization rate is low, and businesses lack the resources for innovation. The capacity to supply high-tech and technically complex components and spare parts does not yet meet the requirements for deep participation in global production chains…

According to Tran Van Nam, Chairman of the Board and General Director of MBT Electrical Equipment Joint Stock Company, most of MBT's raw materials, as well as machinery and equipment, have to be imported because the quality of domestic products and machinery does not yet meet the demand.

According to Mr. Tran Van Nam, not only MBT, but industrial manufacturing businesses in general, and supporting industries in particular, urgently need support from all levels and sectors, especially associations, in their role of bringing together businesses from many fields, acting as a liaison to connect the needs between businesses, creating conditions for cooperation to increase production capacity, improve product quality to open up more new trading partners and boost consumption.

Add support policies

Hanoi Plastic Joint Stock Company manufactures high-quality plastic components.

Recognizing the inherent weaknesses and policy shortcomings, on July 17, 2025, the Government issued Decree No. 205/2025/ND-CP, amending and supplementing Decree No. 111/2015/ND-CP on the development of supporting industries. Effective from September 1, 2025, the decree brings about more preferential policies and stronger support in technology, human resources, finance, land, administrative procedures, etc. This creates expectations of attracting more investment into the supporting industry sector, especially in the context of businesses restructuring global supply chains and shifting towards domestic production.

Dr. Mac Quoc Anh, Vice President and General Secretary of the Hanoi Small and Medium-sized Enterprise Association, believes that businesses are facing new opportunities as the Government has expanded incentives in terms of capital, technology, human resources, and markets, creating a strategic impetus for Vietnam's supporting industries to accelerate in the coming time. A series of financial, technical, and market support mechanisms will be expanded. Research and development, technology transfer, and improving the quality of human resources for the supporting industries will also receive more attention, with support levels reaching up to 70%.

According to Nguyen Trung Kien, General Director of KNTECH Company, preferential policies help businesses, especially small and medium-sized enterprises (SMEs), access advanced technology, thereby improving product quality and increasing competitiveness. In addition, SMEs in the industry benefit from support under the Law on Supporting Small and Medium-Sized Enterprises, including legal advice and simplified administrative procedures.

According to Nguyen Kieu Oanh, Deputy Director of the Hanoi Department of Industry and Trade, increasing incentives for businesses is a necessary "remedy" given that domestic manufacturing depends on imported raw materials and the number of businesses participating in the supply chains of the foreign direct investment sector is still modest.

When implemented systematically and transparently, Decree No. 205/2025/ND-CP will act as a "lever" to promote the development of the entire supporting industrial ecosystem towards modernity, efficiency, and integration. This is a prerequisite for Vietnam to avoid dependence on imported components and raw materials; at the same time, it will increase its ability to participate in regional production networks and take advantage of the wave of international investment relocation. Economic experts all agree that this is a strategic boost, helping businesses overcome investment cost barriers, access international markets, and build independent production capacity.

Source: https://hanoimoi.vn/cu-hich-phat-trien-cong-nghiep-ho-tro-710607.html