In the first half of 2026, the US textile and apparel import market showed significant divergence: India's exports to the US plunged 23.3% year-on-year, falling from $5.35 billion to $4.10 billion, directly losing $1.25 billion in orders; meanwhile, ASEAN exports to the US rose 4.5% against the trend. This contrast signals a deep adjustment in Asia's textile export landscape, driven not only by short-term tariff policy shocks but also by the long-term inertia of supply chain shifts.
Background
India's share in the US textile and apparel import market dropped from 10.4% in the same period last year to 8.6%, a decline of 1.8 percentage points. Notably, the overall US import market also contracted, but India's export decline was more than three times the market average, indicating not just market shrinkage but structural order losses. Meanwhile, ASEAN's positive growth shows that US buyers are actively adjusting sourcing allocations, shifting orders from high-risk regions to Southeast Asia, which offers a more stable policy environment.
The textile and apparel industry operates with a strong lead-time cycle. Spring and summer items entering the US market in H1 2026 were typically sourced and ordered between late 2025 and early 2026. During this period, India faced high tariff policy uncertainty, making US brands and buyers cautious, leading them to reduce order allocations for India. Tariff risk directly translated into cost expectations, making ASEAN countries with relatively stable trade policies the preferred alternative for order shifting.
Industry Impact
Order flows exhibit significant supply chain inertia. Once buyers finalize sourcing contracts, lock in production schedules, and arrange shipping logistics, the entire supply chain is set. Even if tariff pressures ease later, orders already allocated are unlikely to return to India in the short term. This means India may not only lose the $1.25 billion in orders for H1 but also face continued share erosion for several quarters.
This order shift exposes competitive weaknesses in South Asian textile origins. US buyers now consider policy stability and supply chain predictability as equally important as cost factors. Tariff volatility amplifies India's export uncertainty, while ASEAN origins, with more stable policies and improving supply chains, are seizing capacity and channel advantages once held by India. For global textile traders, this data sends a clear signal: over-reliance on a single market risks severe shocks from policy changes.