A striking contrast is reshaping the narrative of global textile trade: in the first half of 2026, India's textile and apparel exports to the US fell 23.3% year-on-year, while ASEAN exports to the US grew 4.5% against the trend. India lost $1.25 billion in orders, and its market share in the US shrank from 10.4% to 8.6%. This is not a simple zero-sum shift but a reordering of competitive positions in Asia's textile sourcing landscape, driven by tariff uncertainty and supply chain inertia.
Data Behind the Share Shift
Public customs data show that from January to June 2026, India's textile and apparel exports to the US dropped from $5.35 billion to $4.10 billion compared with the same period last year, a decline more than three times the overall US import contraction. This indicates that India is not merely following a shrinking market but is being actively reduced by buyers in their order allocation. During the same period, ASEAN exports to the US grew 4.5% year-on-year, a notable achievement given the overall downturn in US imports.
The share change is equally striking: India's share of US textile and apparel imports fell from 10.4% to 8.6%, losing 1.8 percentage points in a year. For buyers, these numbers confirm that India's position as a sourcing destination is becoming more replaceable. For factories, the direct consequences are idle capacity and cash flow pressure.
Tariff Uncertainty and the Misalignment of Lead Times
The textile and apparel industry has a strong lead-time cycle: spring/summer goods arriving in the US in the first half of the year are typically ordered in the fourth quarter of the previous year or early in the same year. This means that the order allocation for H1 2026 reflects tariff policy expectations from the prior quarter.
During that window, Indian suppliers were clouded by tariff volatility, prompting US brands and buyers to reduce their order share from India and shift to ASEAN countries with more stable policy environments. This behavior is essentially risk management rather than simple price comparison. For India's textile industry, it exposes the sensitivity of its export structure to single-market policies and highlights the weight of supply chain predictability in international sourcing decisions.
Supply Chain Inertia and Industrial Cluster Transmission
Order flows have strong inertia. Once buyers finalize sourcing contracts, lock production schedules, and confirm shipping plans, the entire supply chain arrangement becomes fixed. Even if tariff risks ease later, orders already allocated are unlikely to return to India quickly. This means India is not only losing H1 2026 orders but may also lose production slots for the next two to three quarters.
The impact on industrial clusters is profound. Textile clusters in Tirupur and Surat will face lower capacity utilization and employment pressure, while ASEAN producers like Vietnam, Indonesia, and Cambodia may attract new capacity investment. For domestic fabric clusters such as Keqiao and Shengze, the growth in ASEAN orders implies increased export opportunities for upstream fabrics and accessories, but there is also a risk that Southeast Asia's local supply chains will gradually substitute for intermediate goods trade.