In the first half of 2026, India's textile and apparel exports to the US plunged 23.3% year-on-year, falling from $5.35 billion to $4.10 billion, a loss of $1.25 billion in orders. Meanwhile, ASEAN exports to the US rose 4.5% against the overall market contraction. This contrast reveals a global supply chain reshuffle driven by policy uncertainty, with implications far beyond India.
Data Signals Behind the Shift
India's share in the US textile and apparel import market dropped from 10.4% to 8.6%, a decline of 1.8 percentage points. Notably, India's export decline was more than three times the overall US import drop, indicating structural losses rather than a shrinking market. In contrast, ASEAN's positive growth amid a shrinking market suggests buyers are actively diversifying sourcing, not just cutting volumes.
For sourcing managers, the key takeaway is risk premium. When tariff policies fluctuate, US brands and importers tend to allocate orders to more stable origins, even at higher costs. ASEAN countries have improved trade agreements and customs efficiency, making them preferred alternatives to India.
Tariff Uncertainty and Supply Chain Inertia
The core trigger for order losses is tariff uncertainty. Textile and apparel have long lead times; orders for spring/summer 2026 were largely decided in late 2025 and early 2026. At that time, Indian suppliers faced higher tariff risks, prompting buyers to cut allocations and shift to ASEAN.
More critical is supply chain inertia. Once contracts are signed, production schedules locked, and logistics arranged, the entire chain becomes fixed. Even if tariff risks ease, shifted orders are unlikely to return quickly. India is losing not just current orders but future capacity allocations and channel relationships.
For factories, inertia implies that rebuilding capacity investment and client relationships takes time. ASEAN factories are reaping the benefits, but their capacity expansion also carries risks of overconcentration.
Implications for Global Textile Trade
This data highlights the competitive weakness of South Asian origins: policy stability and supply chain predictability are now as important as cost. To regain US market share, India needs more than tariff improvements; it must enhance efficiency, delivery reliability, and trade facilitation.
For global textile traders, three lessons emerge:
- Over-reliance on a single market risks severe order volatility; diversification is essential.
- Policy uncertainty translates directly into order losses; companies need rapid response mechanisms to track trade policy changes.
- Supply chain inertia means order shifts are long-term; businesses should prepare backup origins in advance.
Practical Recommendations
For Sourcing Managers - Include policy stability as a core criterion when evaluating suppliers to avoid supply disruptions. - Build multi-origin backup mechanisms for key categories to handle sudden tariff changes. - Negotiate flexible order terms allowing quota adjustments in case of policy shifts.
For Exporters - Expand customer bases in stable regions like ASEAN to offset traditional market fluctuations. - Strengthen digital supply chain management to improve responsiveness and meet predictability demands. - Monitor US consumer demand and inventory cycles to adjust production plans and avoid stockouts or surpluses.
Competition in textile trade has shifted from pure cost to comprehensive strength. Those who are more stable, faster, and more predictable will gain an edge in the next round of order allocation.