In the first half of 2026, the US textile and apparel import market experienced notable structural changes: India's exports to the US fell 23.3% year-on-year, from $5.35 billion to $4.10 billion, resulting in a direct loss of $1.25 billion in orders, with market share dropping from 10.4% to 8.6%. This decline is more than three times the overall US import contraction, indicating that India is not merely suffering from a shrinking market but facing additional competitive pressures. Meanwhile, ASEAN exports to the US grew 4.5% against the trend, signaling a clear redistribution of Asia's textile supply chain.
Background: Tariff Uncertainty as the Trigger
The textile and apparel industry is characterized by a long lead time for orders. Spring and summer collections entering the US market in the first half of the year are typically sourced and contracted in the previous year's fourth quarter or early first quarter. Therefore, the tariff policy environment during this window directly determines suppliers' competitive position in buyers' order allocation. During the decision period for H1 2026 orders, Indian suppliers faced persistent tariff policy uncertainty, with the risk of higher duties looming. This made US brands and buyers cautious in their sourcing choices, actively reducing order allocations to India and shifting some capacity to ASEAN countries with more stable policy environments. This behavior is not a short-term reaction but a rational choice based on cost predictability—tariffs directly erode brand margins, while Southeast Asian origins offer more stable policy expectations.
Industry Impact: Order Inertia and South Asian Vulnerabilities
A key characteristic of trade flows is inertia. Once buyers finalize sourcing contracts, lock in production schedules, and arrange logistics, the entire supply chain configuration is fixed. Even if tariff risks ease later, diverted orders are unlikely to return to India quickly, with effects persisting for several quarters. This means India loses not only H1 orders but also potential future share. More fundamentally, this loss highlights the competitive weaknesses of South Asian textile origins: beyond cost, policy stability and supply chain predictability have become core considerations for US buyers. Tariff volatility amplifies uncertainty for Indian exports, while ASEAN, with its stable policies and improving industrial infrastructure, is emerging as a safer alternative. For global textile traders, these data offer important insights: over-reliance on a single market exposes businesses to policy shocks, and diversification and comprehensive competitiveness are essential for long-term resilience.