Order Migration Under Tariff Shadows: India Loses $1.25 Billion in US Textile Exports as ASEAN Gains Ground

In the first half of 2026, US textile and apparel imports showed a sharp divergence: India's exports plunged 23.3% year-on-year, losing $1.25 billion in orders, while ASEAN grew 4.5%. This contrast is not accidental but a microcosm of supply chain redistribution driven by tariff uncertainty. For exporters reliant on a single market, these figures warrant deep reflection.

Background

According to data from the US Office of Textiles and Apparel (OTEXA), India's textile and apparel exports to the US fell from $5.35 billion to $4.10 billion in H1 2026, a decline of 23.3%, more than three times the overall US import drop. During the same period, India's share of the US import market slipped from 10.4% to 8.6%, a loss of 1.8 percentage points.

In contrast, ASEAN exports to the US grew against the trend, steadily increasing market share, becoming an important option for US buyers adjusting their sourcing. This shift reflects a deep restructuring of global textile supply chains.

The core driver of order loss is tariff policy uncertainty. The textile and apparel industry has a strong lead time: orders for spring/summer goods entering the US in the first half are typically finalized between the end of the previous year and the beginning of the current year. During the decision window for H1 2026 orders, Indian suppliers faced tariff policy volatility, prompting US brands and buyers to proactively reduce their Indian sourcing allocation and shift to ASEAN countries with more stable policy environments.

Industry Impact

Supply chain inertia is key to understanding this order migration. Once buyers finalize sourcing contracts, production schedules, and logistics plans, the entire supply chain arrangement becomes path-dependent. Even if tariff pressures ease later, allocated orders are unlikely to return to India quickly, with effects possibly lasting several quarters. This means India loses not only current orders but also opportunities for capacity deployment over the next one to two years.

For India's textile industry, this decline exposes the fragility of its export structure: over-reliance on the US market and a lack of buffer mechanisms against policy fluctuations. In contrast, ASEAN countries have enhanced resilience through stable trade agreements and diversified customer bases. For global buyers, this shift signals that supply chain stability and predictability are becoming as critical as cost.

Practical Recommendations

For Buyers - Re-evaluate supplier portfolios: incorporate policy stability as a core criterion, avoid over-concentration in a single origin, and consider a balanced mix between ASEAN and South Asia. - Lock tariff terms during order lead times: clarify tariff change sharing mechanisms at contract signing, or use phased ordering to reduce policy shock risks. - Focus on ASEAN capacity quality: prioritize factories with certifications and rapid response capabilities to ensure quality and delivery for transferred orders.

For Exporters - Diversify market presence: reduce dependence on a single country or region, explore emerging markets such as the Middle East and Latin America to spread policy risk. - Strengthen supply chain resilience: establish multi-regional backup capacity and enhance rapid switching capabilities to respond to sudden order shifts. - Monitor policy dynamics: set up tariff and trade policy monitoring mechanisms to anticipate risks and adjust quotations and production plans accordingly.