Textile Industry

At present, around 100 enterprises are operating in the textile sector, where 38.3% are fully foreign invested companies, 46.8% are joint ventures and the remaining 14.9% are domestic manufacturers.

Nearly 20,000 employees are working in this sector, which represents approximately 12 percent of total workforce of the industrial sector.

Currently this industry is manufacturing about 5.3 percent of the Gross Industrial Products (GIP) and sharing more than 16 percent of the total export. Like many developing countries, the textile industry in Mongolia is based on the orders from overseas.

Main features of textile industry in Mongolia:

Favorable trade conditions in international market
Appropriate positions in US and European market
Advanced technology and production lines
Key document - “Program for development of textile industry”, approved by the Government The main objective of the Program is to create a fertile business environment for the development of the textile industry.

In order to fulfill the main objectives, the following measures are taken:

Creating more favorable trade conditions and expanding foreign relations to increase exports and to find new market niches
Creating a productive legal framework for developing the textile industry
Supporting domestic production rather than imports
Improving industrial efficiency through the enhancement of management skills
Creating a non-discriminatory tax environment for foreign and domestic investors
Helping former manufacturers in the rural areas to recover
Promoting capacity as well as training of the employees

As WTO has abolished the quota system for the textile products, the Parliament of Mongolia has approved the Law of exemption from VAT and Customs duty on textile raw materials and spare parts.