Amid a contraction in US textile and apparel imports, India's exports to the US suffered a decline far exceeding the average. In H1 2026, India's textile and apparel exports to the US fell 23.3% year-on-year, from $5.35 billion to $4.10 billion, directly losing $1.25 billion in orders. This decline was more than three times the overall US import drop, indicating that India's competitive disadvantage was amplified rather than merely following the market trend.
Background
India's share of the US textile and apparel import market slipped from 10.4% to 8.6% year-on-year, a loss of 1.8 percentage points. Meanwhile, ASEAN exports to the US grew 4.5%. The contrasting trends signal a substantive shift in US buyers' sourcing allocation, reflecting a broader rebalancing of the global textile supply chain rather than a short-term fluctuation.
Tariff uncertainty is the core catalyst for this order loss. The textile and apparel industry operates on a long lead time; orders for spring/summer apparel entering the US market in H1 2026 were largely placed between late 2025 and early 2026. During this critical window, Indian suppliers faced higher tariff risks, prompting US brands and buyers to be more cautious in order allocation, reducing India's share and shifting to more stable ASEAN origins.
Importantly, order transfers exhibit supply chain inertia. Once buyers finalize sourcing contracts, lock production schedules, and secure logistics plans, the entire supply chain arrangement solidifies. Even if tariff pressures ease later, allocated orders are unlikely to return to India in the short term. This means India loses not only current orders but also production slots for several future quarters.
Industry Impact
The data underscores that policy stability is becoming as critical as cost in supplier selection. US buyers increasingly prioritize supply chain predictability. Tariff volatility amplifies uncertainty for Indian exports, pushing buyers toward safer Southeast Asian alternatives. Once formed, such preferences create path dependency, making reversal difficult in the near term.
For India's textile industry, regaining lost US market share requires more than improved tariff conditions. ASEAN producers have already seized capacity and channel advantages, creating new competitive barriers. India needs systematic adjustments in production efficiency, product value, and policy certainty to rebuild buyer trust.
For global textile traders, the India case is a warning: over-reliance on a single market exposes firms to sharp order fluctuations. Diversified market layouts and supply chain resilience are key to withstanding external shocks. US consumer demand, inventory cycles, and tariff policies will continue to drive order flows, but the competitive landscape among origins has shifted.