While the overall US textile and apparel import pie shrank, India's export drop was more than three times the market average. In H1 2026, 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. The US total import decline was under 8%, while ASEAN exports grew 4.5%. This divergence is not merely weak demand but a reallocation of global supply chains amid policy shocks.
Structural Divergence Behind the Data
India's share of US textile and apparel imports slipped from 10.4% to 8.6%, losing 1.8 percentage points in a year—a rare magnitude among major Asian suppliers. In contrast, ASEAN's positive growth signals that US buyers are actively shifting sourcing from high-policy-risk South Asia to more stable Southeast Asia.
Notably, India's decline was not uniform across all categories. The impact was most severe in spring/summer apparel, which has a long lead time (6-9 months) and is highly sensitive to tariff policy. Fast-fashion orders and basic items were less affected, indicating some stickiness in high-end and differentiated segments, but overall competitiveness is eroding.
How Tariff Uncertainty Reshapes Ordering Logic
The textile industry has a strong seasonal lead-time feature: US spring/summer orders are typically decided between late last year and early this year. During this window, tariff policy uncertainty for Indian suppliers directly influenced US brands' and importers' sourcing decisions. Unresolved tariff risks amplify cost unpredictability, prompting buyers to shift orders to ASEAN factories with more predictable policy environments.
This "policy hedging" is not short-term. Once supply chains are rearranged, inertia sets in: after contracts are signed, capacity locked, and logistics arranged, the entire process is fixed. Even if tariff pressure eases later, diverted orders are unlikely to return quickly. India's loss is not just $1.25 billion in H1, but potentially several quarters of order continuity.
Transmission Effects on Global Textile Trade
India's share loss and ASEAN's gain have deep implications. For Southeast Asian suppliers, this incremental volume is not just a short-term windfall but a window to build long-term customer relationships. US buyers, when re-evaluating suppliers, will weigh policy stability and delivery predictability more heavily than before. If ASEAN consolidates its capacity and channels, it will benefit for years.
For Chinese textile companies, the India-ASEAN shift is a double-edged sword. Some Chinese fabrics and yarns are exported to India and ASEAN for downstream processing, so order transfers may indirectly affect demand for Chinese upstream materials. On the other hand, ASEAN's higher capacity utilization may increase its purchases of Chinese intermediate goods, creating new export opportunities for chemical fiber and fabric producers.