Production of textile and clothing in Armenia's light industry holds enormous potential for development since during the Soviet era, the sector was considered one of the economy's key areas, which constituted one-quarter of the total workforce. Within the Soviet Union, Armenia was one of the major suppliers of clothing and textile.
Currently, it bears strategic importance for the national economy of Armenia, accounting for its vast potential. Even though the clothing and textile sector constitutes only 2% of manufacturing, it is continuously growing. The clothing industry's production volumes in 2020 compared to 2019 increased from 56.3 million USD to 59.8 million USD. In the period of 2018-2020, the sector registered an increase of 28% in the production of clothing. In 2019 compared to 2014, it recorded almost 4 times’ growth in AMD value with comparable prices.
The main subsectors with high production growth are socks, coats, jackets, fabric, and rugs. Currently, 35 textile and 110 clothing companies are operating in the territory of Armenia. In addition to mass consumption products, Armenian textile/clothing companies are also famous for subcontracting for world-known brands.
The export of Armenian clothing reached 169.4 million USD in 2020.
2018-2019 Production Growth, %
The main export destinations are Russia, Italy and Germany. To stimulate the investments, the Armenian government has implemented numerous assistance programs, making Armenia an inviting platform for foreign investors. Armenia is significantly closer to European and Russian markets. Companies can arrange supplies of finished garments door-to-door to Western Europe in just seven days.
Another indicator of the sector's potential is the increase in the number of employed in this sector. Within one year, the number of employees in the clothing sector in 2019 increased by 20%. Armenia's clothing sector has rich experience and production traditions, skilled workforce with competitive salaries. Salaries are lower than in China and Eastern Europe and among the lowest in the Eurasian Economic Union. It is noteworthy that the sector has a reputation for the workforce's ethical treatment, which is an increasingly important factor. Armenia also offers competitive energy costs. Above all, the Armenian textile industry is focused on producing high-quality products by developing its own style and functionality, unique and up-to-date design while maintaining consistent quality. Highly skilled pattern-makers, tailors and sophisticated expert fashion designers are key to conquer the fashion industry.
The UNIDO Project “Improving Competitiveness of Export-Oriented Industries in Armenia through Modernization and Market Access,” initiated back in 2014 in partnership with the Ministry of Economy of Armenia and funded by the Government of the Russian Federation, is aimed at transforming private sector producers in textile/clothing and footwear/leather goods sectors into viable business entities able to create employment and sustainably, contribute to adding value, income generation and export growth.