India's Textile Exports to US Plunge 23.3%: Tariff Uncertainty and ASEAN's Rise Reshape Global Supply Chains

In the first half of 2026, India's textile and apparel exports to the United States plummeted by 23.3% year-on-year, from $5.35 billion to $4.10 billion, directly losing approximately $1.25 billion in orders. This decline was more than three times the overall drop in US textile imports, indicating India's market share fell from 10.4% to 8.6%. Meanwhile, ASEAN exports to the US grew by 4.5%, signaling a deep redistribution in global textile trade.

Background

India's sharp decline in US-bound orders is not an isolated event but the result of a contracting US import market combined with intensified competition among producing countries. According to data from the US Office of Textiles and Apparel, total US imports of textiles and apparel declined in the first half of 2026, but India's drop far exceeded the average, exposing the fragility of its export structure. India relies heavily on the US market to absorb its cotton textiles and ready-made garments, and US buyers tend to reduce orders from high-cost, high-risk origins when demand weakens.

Tariff uncertainty is the core trigger for the order loss. The textile industry has a long lead time; spring/summer orders are typically finalized in late previous year or early this year. During this period, Indian suppliers faced the threat of volatile US tariff policies, prompting American brands and importers to reduce India's allocation and shift to ASEAN countries with more stable policy environments. This cautious approach is directly reflected in the trade data—India's export decline far exceeded the overall import drop, while ASEAN grew against the trend.

Industry Impact

Order flows have strong supply chain inertia, and even if tariff pressures ease in the future, transferred orders are unlikely to return to India quickly. Once buyers finalize sourcing contracts, lock in production schedules, and arrange logistics, the entire supply chain is fixed, and switching partners is costly. This means India loses not only current orders but potentially market share for several future quarters, while ASEAN producers consolidate their capacity and channel advantages.

This shift serves as a warning for global textile traders: over-reliance on a single market or policy environment can lead to severe volatility. India's lesson is that cost advantage is not the only determinant of competitiveness; policy stability and supply chain predictability are now key considerations for US buyers. For major exporters like China, Vietnam, and Bangladesh, maintaining competitiveness amid uncertain trade conditions is an urgent issue.

Practical Recommendations

For Buyers - Re-evaluate supplier diversification strategies, avoid over-concentration in a single origin, and prioritize countries with stable policy environments. - Include tariff risk-sharing clauses in contracts to clarify how cost increases due to policy changes are allocated, reducing uncertainty. - Deepen cooperation with ASEAN suppliers, leveraging their growth momentum to optimize supply chain resilience while monitoring their capacity constraints and quality consistency.

For Exporters - Diversify markets to reduce dependence on the US, actively explore emerging markets such as the EU, Middle East, and Latin America. - Enhance supply chain predictability through digital management to shorten lead times and improve rapid response to external shocks like tariffs. - Monitor tariff policy developments, establish early warning mechanisms, and adjust production and logistics plans in advance to avoid order losses due to sudden policy changes.