The policies and provisions set out in the draft Law on Key Industries serves as breakthrough measures to address fundamental bottlenecks in the development of key industries, shifting the focus from extensive to intensive growth, and from processing and assembly towards research, design, and manufacturing in Viet Nam. They also seek to increase knowledge and technological content and drive the modernisation of the industrial sector.
Policies remain fragmented
In recent years, Viet Nam has implemented a range of decisive measures to formulate, improve, and effectively enforce policies and laws on industrial development, achieving positive results in broader socioeconomic progress and targeted industrial growth. However, according to the Ministry of Industry and Trade, limitations remain, including the absence of a clear legal framework defining development priorities for key industries during the country’s industrialisation process.
Although laws are already in place governing certain specific areas such as chemicals, the digital technology industry, electricity, and mineral extraction, while specialised industrial sectors such as the environmental industry, railway industry, aviation industry, and UAV manufacturing are covered by sector-specific legislation, there is still no single law providing a unified framework of special policies for developing multiple foundational, strategic, and priority industries such as mechanical engineering and manufacturing, metallurgy, materials, and biotechnology. This has resulted in a lack of a consistent and sustainable legal basis for these sectors.
Policies and strategies for industrial development remain fragmented, with no provisions identifying key and strategic industries together with specific policies to promote their development. At the same time, they have not fully met practical requirements and lack the resources needed for effective implementation.
Meanwhile, major economies such as the US, the European Union (EU), Japan, the Republic of Korea, and China have all adopted strong policies to protect and promote the development of certain vital industries. This poses challenges for Viet Nam in attracting investment and limits its competitiveness as it integrates into international markets. Clearly, as countries around the world increasingly employ industrial policies backed by strong government support, Viet Nam must also act to adopt timely and flexible policies to keep pace with this trend.
Adding a range of special mechanisms
Conclusion No. 18-KL/TW of the second Plenum of the 14th Party Central Committee on the socio-economic development plan, national finance, public borrowing, and debt repayment, and the five-year medium-term public investment plan for 2026–2030, alongside the target of double-digit economic growth, calls for the building and modernisation of a strong national industrial sector. It also calls for a focus on improving the efficiency and competitiveness of a number of foundational industries, including energy, nuclear power, mechanical engineering and manufacturing, metallurgy, rail transport, shipbuilding, new materials, chemicals, digital technology, biotechnology, and supporting industries, tied to participation in global value chains. In light of the current situation of domestic industries, while drawing on the experience of industrialised countries and implementing tasks assigned by the Government, the Ministry of Industry and Trade has formulated and submitted to the National Assembly the draft Law on Key Industries.
The draft law is structured around the central objective of developing national industrial capacity, introducing a range of mechanisms concerning key industrial enterprises, strategic investors, industrial development commitments, reciprocal projects, key industrial complexes, offshore industries, rare earths, and strategic materials, as well as financial instruments for the development of key industries.
Tran Viet Hoa,
Director General of the Industrial Agency under the Ministry of Industry and Trade
Tran Viet Hoa, Director General of the Industrial Agency under the Ministry of Industry and Trade, said the draft law is structured around the central objective of developing national industrial capacity. It introduces a range of mechanisms concerning key industrial enterprises, strategic investors, industrial development commitments, reciprocal projects, key industrial complexes, offshore industries, rare earths, and strategic materials, as well as financial instruments for the development of key industries. Regarding preferential policies and support for key industries, the draft law establishes mechanisms for placing orders, organising tenders, assigning tasks, and appointing contractors to supply products, as well as localisation requirements in key projects to ensure stronger domestic production capacity and self-reliance.
The draft law also sets out preferential and support mechanisms for suppliers receiving orders or appointed as contractors, as well as investors implementing key projects. These provisions are intended to provide sufficiently strong tools to develop domestic core industrial capabilities, reduce dependence on imports, and increase the economy’s level of self-reliance. In particular, the draft introduces a number of new measures, including support for the production of first-of-a-kind products, controlled testing (sandbox mechanisms), and the selection of foreign strategic investors tied to specific commitments to support Vietnamese enterprises in joining supply chains, increase localisation rates, raise spending on research and development in Viet Nam, transfer technology, and train highly skilled personnel, among other areas.
This approach seeks to exchange incentives for commitments to developing endogenous capabilities, thereby improving the effectiveness of attracting higher-quality foreign investment. The passage and implementation of the Law on Key Industries in the coming period is expected to provide a major boost to key industries, creating momentum for the country to achieve a breakthrough in development.
