In the first half of 2026, the US textile and apparel import market showed a clear divergence: India's exports to the US dropped 23.3% year-on-year, losing $1.25 billion in orders, with market share falling from 10.4% to 8.6%. Meanwhile, ASEAN exports to the US grew 4.5%. This shift reflects not just short-term tariff impacts but deeper adjustments in risk appetite and sourcing strategies across the global textile supply chain.
Data Signals Beneath the Surface
India's export decline was more than three times the overall US import contraction. This indicates that India is not merely suffering from a shrinking market but is experiencing additional order diversion. In contrast, ASEAN's growth suggests that US buyers are actively rebalancing their sourcing portfolios, moving orders away from India toward Southeast Asia. This shift is based on assessments of policy stability and supply chain predictability.
The order cycle for spring/summer apparel, which dominates H1 shipments, typically begins in late Q4 of the previous year. During that period, India faced high tariff uncertainty, prompting buyers to favor ASEAN suppliers with more stable policy environments. This front-loading amplified the impact of tariff policy, explaining why India's decline far exceeded the market average.
The Inertia of Order Shifts
Once orders are contracted, production scheduled, and logistics locked in, they become rigid. Even if tariff risks ease later, orders already diverted are unlikely to return quickly. This inertia means India's loss is not limited to H1 but could affect sourcing shares for several quarters. For exporters reliant on a single market, such inertia can be particularly damaging.
More fundamentally, this order loss exposes structural weaknesses in South Asian sourcing. US buyers consider not only cost but also policy continuity and supply chain stability. India's tariff volatility undermines its appeal as a long-term sourcing base, while ASEAN benefits from its stable policy environment and mature industrial infrastructure. For global textile traders, this data underscores the dangers of over-reliance on a single market or a single sourcing origin.
Implications for Buyers and Exporters
For buyers, India's order loss means a need to reassess supplier risk exposure. If heavily dependent on Indian sources, it is advisable to accelerate qualification and trial orders with ASEAN suppliers to diversify risk. At the same time, monitor India's tariff policy for potential easing, but allow buffer time for supply chain switching.
For exporters, especially Indian suppliers, relying solely on tariff improvements is insufficient. A more pragmatic approach is to diversify market presence, such as expanding into Europe, the Middle East, or Latin America, to reduce dependence on the US. Enhancing supply chain flexibility and responsiveness is also crucial to adapt to frequent order adjustments. Collaborating with ASEAN partners, such as joint order-taking or capacity sharing, can also create new opportunities amid the shift.