The US textile and apparel import market contracted in the first half of 2026, but the impact varied sharply by origin. India's exports to the US fell 23.3% year-on-year to $4.10 billion from $5.35 billion, losing $1.25 billion in orders and dropping its market share from 10.4% to 8.6%. This decline was more than three times the overall US import contraction, indicating that India was not merely following the market downturn but was actively sidelined by buyers.
Data Signals
The collapse of India's orders to the US stems from multiple factors. The textile and apparel industry has a long lead time, with spring/summer orders typically placed between late 2025 and early 2026. During that window, Indian suppliers faced high tariff uncertainty, prompting US brands and buyers to cut their Indian allocations and shift to ASEAN countries, which boasted more stable policy environments. ASEAN exports to the US grew 4.5% during the same period, creating a clear substitution effect.
This shift is not temporary. Once orders are contracted, production scheduled, and logistics locked in, supply chain inertia sets in. Even if tariff pressures ease later, diverted orders are unlikely to return quickly. For India, this means losing not only $1.25 billion in current orders but also capacity utilization and channel relationships for several quarters ahead.
Implications for Global Supply Chains
India's experience serves as a warning for any textile origin overly reliant on a single export market. In the eyes of US buyers, policy stability and supply chain predictability now rank as highly as cost. Tariff volatility amplifies origin risk, prompting buyers to diversify sourcing. For Chinese textile trading firms, this case is a direct reference—over-dependence on one market can leave them vulnerable to external policy shocks.
The rise of ASEAN is not accidental. Its labor cost advantages, tariff preferences, and improving supply chain infrastructure are attracting global orders. India's share loss is essentially a setback in policy stability competition. Going forward, the reallocation of global textile supply chains will continue to be driven by tariff policies, consumer demand, and inventory cycles.