Retailers Reorder as India Gears Up to Fill China’s 50% Drop in US Apparel Share

For apparel retailers and e-commerce fashion platforms, the stars are aligning: US retail sales reached $7.2 trillion last fiscal year, inventory ratios are back to normal, and China’s share of apparel imports has halved. This means buyers are actively replenishing stocks, and India—with its new UK trade deal and improving tariff landscape—could become a larger slice of the sourcing pie, particularly if EU negotiations succeed.

India's textile industry is on the cusp of a structural opportunity, not from expanding global demand but from a dramatic reallocation of existing sourcing volumes away from China. Brokerage firm Nuvama Institutional Equities highlights that the global textile market, valued at approximately USD 1.6 trillion, grows at a modest 2.5–3.5% annually. The real catalyst is China's halving of its U.S. apparel import share over the past decade, leaving roughly 20% of the American market up for grabs among alternative suppliers—India, Bangladesh, Vietnam, Pakistan, and Indonesia. This shift arrives at a time when tariff parity levels the playing field: most major garment-producing nations now face similar U.S. tariff structures, removing a handicap India contended with for years. The entry into force of the India–UK Comprehensive Economic and Trade Agreement (CETA) on July 15, 2026, further enhances market access, and an India–EU Free Trade Agreement could unlock exponential gains, particularly given India's stagnant 3% share of the EU apparel market versus Bangladesh's 16.7% over a decade. For global buyers and procurement leaders, these developments signal a need to reassess supplier diversification strategies.

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apparel import share over the past decade, leaving roughly 20% of the American market up for grabs among alternative suppliers—India, Bangladesh, Vietnam, Pakistan, and Indonesia.

The U.S. retail environment adds momentum. Nuvama notes that U.S. retail sales grew from USD 5.3 trillion in FY19 to USD 7.2 trillion in FY24, a 6% compound annual growth rate, while retailers simultaneously cut inventories. Now, with inventory ratios normalized, order replenishment is resuming, creating a tailwind for textile exporters. This normalization is critical for the entire supply chain, from fiber to finished garments, as it reduces the whiplash of boom-and-bust ordering that plagued the industry post-pandemic. For India, however, capturing this opportunity is not a given. The country boasts a large cotton crop and one of the world's largest spinning bases but remains heavily reliant on cotton just as global fiber consumption pivots toward man-made fibers (MMF). Historically, India has lagged in garment production due to higher labor costs, fragmented manufacturing structures, and fewer trade advantages. Policy measures like PM MITRA parks aim to create integrated textile clusters to address scale and fragmentation, but their impact is yet to be seen.