US textile and apparel imports contracted in H1 2026, but India's decline was far steeper. Customs data shows India's exports to the US fell 23.3% year-on-year to $4.10 billion from $5.35 billion, losing $1.25 billion in orders. The overall US import decline was about 7%, making India's drop more than three times the average. Its market share slid from 10.4% to 8.6%, indicating a structural squeeze rather than mere market headwinds.
Background
The core driver is tariff uncertainty. Textile and apparel orders are placed months in advance, with spring/summer shipments typically contracted in late Q4 or early Q1. During this period, Indian suppliers faced higher tariff risks, prompting US buyers to reduce allocations from India. In contrast, ASEAN exports to the US grew 4.5% during the same period, creating a substitution effect.
Order migration has supply-chain inertia. Once buyers finalize sourcing, lock production schedules, and arrange shipping, the system becomes rigid. Even if tariff pressure eases later, diverted orders won't return quickly, affecting India for several quarters. This means India loses not only current orders but also future capacity reservations.
Industry Impact
For India's textile sector, this decline exposes its vulnerability to a single market. US buyers increasingly value policy stability and supply-chain predictability over cost alone. Tariff volatility amplifies India's risk, while ASEAN, with stable policies and mature capacity, becomes a 'safe option'.
Globally, this reshapes Asia's export landscape. India's lost orders are flowing to Vietnam, Indonesia, and Cambodia, which offer cost, tariff, and logistics advantages. Once buyers switch suppliers, new partnerships form, making it costlier for India to regain share.