In the first half of 2026, the US textile and apparel import market witnessed a significant divergence: India's exports to the US plummeted by 23.3% year-on-year, falling from $5.35 billion to $4.10 billion, with a direct loss of $1.25 billion in orders and market share dropping from 10.4% to 8.6%. Meanwhile, ASEAN exports to the US grew by 4.5%. This contrast reflects a deep restructuring of the global textile supply chain, with tariff uncertainty as the core driver.
Background
India's share in US textile and apparel imports shrank by 1.8 percentage points, with a decline rate more than three times the overall US import contraction. This indicates that India is not merely suffering from a shrinking market but experiencing additional order losses. Public trade data show that the overall US import decline was far smaller, highlighting India's aggravated competitive disadvantage.
The timing of order shifts is telling. Spring and summer apparel entering the US market in H1 2026 largely involved procurement decisions made between late 2025 and early 2026. During that period, Indian suppliers faced high tariff policy uncertainty, prompting US brands and buyers to proactively reduce allocations from India and shift orders to ASEAN countries with more stable policy environments. This behavior was not impulsive but based on long-term supply chain reliability considerations.
Industry Impact
Order flows exhibit significant inertia. Once buyers finalize sourcing contracts, lock in production schedules, and secure logistics plans, the entire supply chain arrangement becomes fixed. Even if tariff risks ease later, orders already allocated are unlikely to return to India in the short term. This inertia means India's loss extends beyond H1 orders and may impact export performance for several quarters.
For ASEAN, this influx is not just a temporary gain. By absorbing transferred orders, Southeast Asian producers strengthen capacity utilization, worker skills, and supporting systems, creating a virtuous cycle. US buyers now view policy stability and predictability as equally important as cost, providing structural support for ASEAN to continue attracting orders.
For Chinese textile trading companies, this shift serves as a warning. Although China is not a direct beneficiary of this order transfer, the trend toward diversified sourcing strategies is accelerating. The US market's emphasis on supply chain resilience means no single origin can rely solely on cost advantages; they must also offer policy stability and rapid response capabilities.