In the first half of 2026, US textile and apparel imports shrank overall, but India's exports to the US fell by more than three times the overall decline. India's export value dropped from $5.35 billion to $4.10 billion year-on-year, a 23.3% decrease, losing $1.25 billion in orders, while its US market share fell from 10.4% to 8.6%. Meanwhile, ASEAN exports to the US grew by 4.5%. These figures indicate that the redistribution of global textile supply chains is no longer a slow evolution but a clear tectonic shift.
Background
The sharp decline in Indian exports is not accidental. The textile and apparel industry has a significant lead time; orders for spring/summer goods entering the US in the first half of 2026 were mostly finalized between late 2025 and early 2026. During this critical window, Indian suppliers faced persistent tariff policy uncertainty, prompting US buyers to reduce allocations from India and shift orders to ASEAN countries with more stable policy environments. This means India lost not only current-season orders but also buyer confidence in future cooperation.
From an industrial cluster perspective, Indian textile hubs like Tirupur and Surat are known for cotton textiles and knitwear, but these products are highly substitutable. Once cost advantages are offset by policy uncertainty, buyers can easily switch to Vietnam, Indonesia, and other ASEAN origins. ASEAN countries have been strengthening their textile supply chains, improving integration from yarn to garments, and with clear tariff preferences, they naturally become the first choice for order transfers.
Industry Impact
Order transfers exhibit strong supply chain inertia. Once buyers finalize supplier contracts, lock production schedules, and arrange logistics, the entire supply chain setup is solidified. Even if tariff risks ease later, allocated orders are unlikely to return to India quickly, and the impact may last several quarters. For India's textile industry, this means a short-term policy shock could turn into long-term market share loss, while ASEAN origins can seize the opportunity to consolidate relationships with US buyers.
For US buyers, these figures serve as a wake-up call: the risk of over-reliance on a single origin is rising. While India's declining share may benefit ASEAN suppliers in the short term, buyers need more flexible multi-sourcing strategies to hedge against policy volatility in any single region. For factories, the inertia of order transfers also suggests that capacity planning should consider not only current costs but also the policy predictability of destination countries.