US Orders Shift: India's Textile Exports Drop 23.3%, ASEAN Captures $1.25 Billion

Amid a shrinking US textile import market, India has emerged as the most vulnerable link. In H1 2026, India's textile and apparel exports to the US fell 23.3% year-over-year, from $5.35 billion to $4.10 billion, a direct loss of $1.25 billion in orders. This decline is more than three times the overall US import drop, indicating that India is not simply following the market downturn but is being actively reduced by buyers. Meanwhile, ASEAN exports to the US grew 4.5%, illustrating a redrawing of global textile order flows.

Background

India's share of the US textile and apparel import market slipped from 10.4% to 8.6% year-over-year, a 1.8 percentage point decline. This shift is not isolated but part of a broader realignment in global textile supply chains. US buyers' sensitivity to tariff policies directly impacts order allocation. The textile industry operates on long lead times; spring/summer styles for H1 2026 were largely sourced and ordered in late 2025 and early 2026. During this critical window, Indian suppliers faced tariff uncertainty, prompting US brands and importers to shift some orders to ASEAN countries with more stable policy environments.

Industry Impact

Order transfers exhibit significant supply chain inertia. Once buyers finalize sourcing contracts, lock in production schedules, and arrange logistics, the entire supply chain setup becomes fixed. Even if tariff pressures ease later, allocated orders are unlikely to return to India quickly, meaning the Indian textile industry will face an order gap for at least several quarters. More profoundly, US buyers' supplier selection criteria are shifting from cost-only to a balance of cost, policy stability, and supply chain predictability. Repeated tariff volatility amplifies India's export uncertainty, while ASEAN, with its relatively stable trade environment and improving industrial infrastructure, is absorbing this transferred capacity.

For the global textile trade landscape, this is not just a share battle between India and ASEAN but a signal of accelerating multi-regional parallel supply chains. Chinese textile companies should monitor whether ASEAN's capacity expansion will squeeze China's share in mid-to-high-end markets and assess their own flexibility in responding to tariff fluctuations. US end-consumer demand, inventory cycles, and tariff policies remain core variables, but supply chain diversification and resilience have become long-term imperatives for all textile-producing nations.

Practical Recommendations

For Buyers - Re-evaluate supplier portfolios, incorporating policy stability as a key criterion to avoid over-reliance on a single source. - Use digital tools to track tariff policy changes and adjust sourcing plans 2-3 quarters ahead to hedge against policy risks. - Build long-term relationships with ASEAN suppliers while retaining India as a backup to maintain bargaining power and supply flexibility.

For Trading Companies - Implement market diversification strategies, expanding into the EU, Japan, South Korea, and emerging markets to reduce dependence on a single market. - Strengthen supply chain resilience, such as setting up overseas warehouses or partnering with factories in multiple regions to quickly respond to order shifts and tariff changes. - Monitor ASEAN's industrial maturity and evaluate options for setting up plants or partnerships in the region to stay close to customers and avoid trade barriers.