In the first half of 2026, the US textile and apparel import market showed significant divergence: India's 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; meanwhile, ASEAN exports to the US grew 4.5% against the trend. This contrast is not accidental but a result of tariff uncertainty and supply chain inertia, signaling a deep adjustment in Asia's textile export landscape.
Data Behind the Decline: India's Pressure Exceeds the Overall Market
India's export decline was more than three times the overall US import contraction, exposing its vulnerability. Market share fell from 10.4% to 8.6%, a drop of 1.8 percentage points. This means that even with weak US demand, India's lost share was not absorbed by other non-ASEAN origins but clearly shifted to Southeast Asia.
For buyers, this signals that India's cost advantage is being offset by policy risk. US brands and importers now assess not only unit prices but also tariff stability, delivery predictability, and supply chain resilience. Indian suppliers that cannot offer a stable policy environment will struggle to win orders even with lower quotes.
Tariff Uncertainty and the Lead-Time Order Cycle
The textile and apparel industry has a strong lead-time characteristic: orders for spring/summer goods entering the US market in the first half are typically finalized between late the previous year and early that year. The tariff policy environment during this period directly determines suppliers' competitive position. In the ordering cycle for H1 2026, Indian suppliers faced ongoing tariff uncertainty, with the risk of higher duties hanging over them, prompting US buyers to be cautious and reduce order allocations to India, shifting to more stable ASEAN sources.
This transmission mechanism is not a one-off shock but has a continuous amplifying effect. Tariff uncertainty not only affects current orders but also undermines buyer confidence in India as a long-term source. Once buyers establish new supplier relationships and quality inspection processes in Southeast Asia, reclaiming orders becomes costly.
Supply Chain Inertia: Orders Won't Return Quickly
Trade chains have a key characteristic: order flows exhibit strong inertia. Once buyers finalize sourcing contracts, lock production schedules, and arrange shipping, the entire supply chain is fixed. Even if tariff risks ease later, allocated orders are unlikely to return to India quickly. This inertia means the impact of H1 2026 order losses may persist for several quarters or longer.
From a broader perspective, this order shift reflects more than a short-term policy shock; it highlights competitive weaknesses in South Asian textile origins. US buyers consider policy stability and supply chain predictability alongside cost. Tariff volatility amplifies India's uncertainty, while ASEAN nations with stable trade policies and infrastructure investment are absorbing orders. This trend may become self-reinforcing.
Implications for Global Textile Trade
These data offer a cautionary tale for global textile traders. First, over-reliance on a single market amplifies risk. India's sharp export fluctuations show that suppliers lacking diversified markets suffer greater shocks when policies change. Second, supply chain planning requires foresight. Buyers should evaluate tariff risk, logistics costs, and policy stability, not just short-term prices.