Under Tariff Shadows, India Loses $1.25B in US Textile Orders as ASEAN Accelerates Supply Chain Shift

In the first half of 2026, the US textile and apparel import market showed significant divergence: India's exports to the US fell 23.3% year-on-year, from $5.35 billion to $4.10 billion, losing $1.25 billion in orders directly; while ASEAN achieved 4.5% growth. India's US market share dropped from 10.4% to 8.6%, a decline of 1.8 percentage points, and its drop was more than three times the overall US import decline. This contrasting data reveals not just a single country's export fluctuation but a signal of global textile supply chain reconfiguration.

Background

India's sharp drop in US-bound orders is not accidental. The textile and apparel industry has a strong lead-time ordering cycle: spring/summer collections arriving in the US in the first half of the year are typically sourced and ordered between the end of the previous year and the beginning of that year. This means the ordering window for H1 2026 orders coincided with the period of highest tariff uncertainty for India. US brands and buyers, when evaluating suppliers, treated tariff risk as a key variable, reducing order allocation to India and shifting toward ASEAN countries with more stable policy environments.

ASEAN's counter-trend growth is not purely price-driven but a victory of supply chain predictability. When tariff variables hang in the balance, buyers prefer origins that can offer stable delivery expectations. This trade-off is reflected in the data as India's share loss and ASEAN's share gain, but underneath is a repricing of supply chain risk by buyers.

Industry Impact

Once orders shift, they carry strong supply chain inertia. Contracts signed between buyers and suppliers, locked production schedules, and arranged shipping logistics form a solidified system that is not easily dismantled. Even if India's tariff pressures ease in the future, already allocated orders are unlikely to return in the short term, and the impact will last for several quarters or longer. This inertia means India loses not just immediate orders but also the continuity of long-term buyer-supplier relationships.

For global textile trade enterprises, the India case offers an important warning: over-reliance on a single market amplifies policy risk shocks. US buyers' supplier selection logic has shifted from pure cost comparison to a comprehensive trade-off of cost, policy stability, and supply chain predictability. This requires exporters to re-examine their market layout and customer structure to avoid excessive risk exposure in a single destination market.

Practical Recommendations

For Buyers - Add policy risk as a dimension in supplier evaluation, prioritizing origins with stable trade environments and predictable tariff policies. - Build a multi-origin backup supplier pool to diversify order risk and avoid supply disruptions due to policy changes in a single origin. - Monitor the capacity and quality performance of emerging origins like ASEAN, adjust procurement quotas accordingly, but also assess their logistics and compliance costs.

For Exporters - Proactively diversify into multiple markets to reduce dependence on a single country or region and enhance resilience. - Strengthen communication with buyers to understand tariff policy trends in advance, and include flexible contract clauses to respond to policy changes. - Improve the transparency and responsiveness of your supply chain, using predictability as a core competitiveness to attract and retain quality customers.