In the first half of 2026, India's textile and apparel exports to the United States fell sharply, with export value dropping from $5.35 billion to $4.10 billion year-on-year, a 23.3% decline—more than three times the overall import contraction. Meanwhile, ASEAN exports to the US grew by 4.5%. This divergence signals a quiet rebalancing of global textile supply chains.
Data Signals Behind the Shift
India's share in the US textile and apparel import market shrank from 10.4% to 8.6%, losing 1.8 percentage points in just one year. This is not a mere market fluctuation but a reflection of shifting buyer confidence. When overall US import demand weakened, India's reduction far exceeded the industry average, exposing its over-reliance on a single market and lack of bargaining buffer.
More notably, ASEAN's growth is not accidental. Vietnam, Cambodia, and Indonesia have been absorbing capacity spillover from China for years, with improving infrastructure and supporting industries. US buyers, while trimming total orders, tend to retain suppliers in more predictable policy environments—a logic clearly reflected in the data.
The Transmission Chain of Tariff Uncertainty
The textile and apparel industry operates with a long lead time. Spring/summer orders entering the US in the first half are typically finalized in the previous year's fourth quarter or early in the current year. This means the order window for H1 2026 coincided with the period of highest tariff policy volatility for India. US brands and importers treat tariff risk as a core cost variable; when expectations are unstable, they proactively reduce allocation to Indian sources.
This transmission is not instantaneous but is solidified through contracts, production schedules, and logistics. Even if tariff pressures ease later, orders already assigned to ASEAN will not quickly return. Supply chain inertia makes the shift persistent, potentially lasting several quarters or longer. For India's textile industry, this is not just a short-term loss but a long-term test of supply chain resilience.
Recalibrating Sourcing Strategies
US buyers are shifting from a purely cost-driven approach to a dual focus on cost and stability. Tariff volatility amplifies India's uncertainty, while ASEAN countries, with relatively stable trade policies and growing capacity, become preferred risk-averse choices. This means future order allocation will weigh supply chain predictability more heavily than mere price advantage.
For global textile traders, these figures offer a critical warning: over-dependence on a single market or policy environment can lead to severe fluctuations under external shocks. Diversification, supply chain resilience, and rapid response capabilities are now key to weathering uncertainties. India's case shows that once policy risk materializes, losses often exceed expectations, and recovery is slow.