A few years ago, exporters like Shalini Jain could insist on minimum orders as big as 3,000 pieces and still keep her order book full. Now, those conversations look very different.

Buyers are testing Indian exporters with batches as small as 200 pieces, and saying no often means losing the order altogether. This is largely because US buyers are shifting sourcing away from India after tariff increases in 2025.

For exporters like Shalini, this doesn’t seem like a temporary phase. She feels that large, price-sensitive fast-fashion orders have largely moved out of her pipeline, with supply chains now more firmly tied to countries like Vietnam and Bangladesh.

India and Bangladesh currently face very similar textile tariffs in the United States, with India paying around 18% and Bangladesh about 19% on most exports. Both countries can qualify for zero tariffs, but only if they use raw materials sourced from the United States, which limits how widely this benefit can be applied. In the past, tariffs were much higher, especially for India, where duties briefly reached up to 50% during trade tensions.

“I reduced my minimum order quantities. It hurts my margins badly. But holding on to a 3,000-piece minimum while buyers are asking for 200-piece trials was costing me conversations entirely. I hired a dedicated merchandiser for fast-fashion planning, someone who understands trend cycles, not just production schedules. That was a new kind of hire for me,” said Shalini Jain, founder of Shalini’s Indian Fashion.

What’s Changing?

Her experience is becoming fairly common across the industry. Indian apparel exporters are adjusting to a different kind of demand environment — one where buyers want smaller orders, quicker turnarounds and more flexibility. Much of this shift is coming from the US, still one of India’s largest apparel markets.

The numbers reflect it. India’s textile exports to the US fell 28.7% year-on-year in February, a sharper drop than Bangladesh’s 16.4% decline, while Vietnam managed a 5% increase. China saw an even steeper fall of 45.2%, according to industry data.

How Are Exporters Responding??

For many exporters, this isn’t just a temporary slowdown. It is showing up in day-to-day operations. Manufacturers are lowering minimum order sizes, keeping fabric ready in advance, using digital tools to speed up approvals, and sometimes outsourcing extra work to smaller units to meet tight timelines.

“I built a digital catalogue so that buyers can make design decisions faster without waiting for physical reference samples,” said Sajal Jain, director at Indian Hand Embroideries.

Deeper Issues

These adjustments help, but they don’t solve everything. While companies are becoming more flexible internally, challenges like logistics delays, high shipping costs and longer turnaround times still hold them back.

Even for the large scale apparel segment, this pressure has been building for a while. As Mihir Parekh, Associate Partner at Foundation for Economic Development, notes, “India’s apparel exports to the US were $11.6 billion (Apr-Dec 2025) vs USD $11.3 billion (Apr-Dec 2024). So, we have remained stagnant while Bangladesh and Vietnam may have increased their exports during this period, thereby gaining market share.”

As Parekh points out, this shift didn’t start recently. “The shift away from India and towards Vietnam and Bangladesh started a decade before 2025 and has to do with structural factors rather than tariffs.”

India’s textile industry faced significant losses when US tariffs briefly rose to around 50%. According to experts, before this, India exported textiles worth about $10.3 billion to the US, but industry estimates suggest exports fell sharply, leading to a direct loss of around $2.5–3 billion (Rs 21,000–25,500 crore).

Many orders were cancelled or delayed, and some exporters had to reduce prices or absorb part of the extra cost, which hurt profits. The impact was especially strong because the US is one of India’s largest textile markets. Experts note Tamil Nadu was the worst affected, especially the Tiruppur region, which accounts for a large share of India’s knitwear exports and sends a significant portion to the US market. Other major textile states like Gujarat (Surat, known for synthetic fabrics) and Punjab (Ludhiana, a key garment hub) also faced reduced demand and pricing pressure.

Two Different Tracks

Over time, this is creating a split within the industry. One side is made up of large exporters dealing with price pressure and faster fashion cycles. The other is smaller, niche players working in high-value segments where competition looks very different.

“My segment, haute couture, embroidered samples; bespoke work is not the same as mass textile exports… So when people talk about Vietnam and Bangladesh eating into Indian orders, that is largely not my fight,” said Sajal Jain.

Embroidery makes up a very small portion of India’s textile industry in terms of revenue. India’s overall textile and apparel sector is valued at around $160–170 billion, while the organised embroidery market is estimated at about $78 million, which is roughly 0.04–0.05% of the total. However, this number does not reflect the full importance of embroidery, because a large portion of this work happens in the informal sector through small workshops and artisans.

In this space, India still has an edge. “Nobody is replacing Indian hand embroidery at the haute couture level. Not Vietnam. Not Bangladesh. Not a machine,” he added.

Even here, though, demand has softened, and rising shipping costs are becoming harder to manage.

What Lies ahead?

“Fast fashion is necessary as much as handlooms because the market demands speed and responsiveness. However, it must be done sustainably, using recycled materials and environmentally responsible processes. Europe, in particular, is pushing this through regulations like the Digital Product Passport (DPP), expected in the next two years. Tiruppur is already prepared for these requirements and is waiting for final guidelines,” said N Thirukkumaran, General Secretary, Tiruppur Exporters Association and Chairman, Esstee Exports India Pvt Ltd. He believes the current slowdown could reverse.

But for now, the shift is visible. Along with improving business, exporters want the government to step in on one key issue — freight costs. Tariff pressure may be going down, but shipping companies have taken advantage and raised their prices, wiping out any gains. Unless this is addressed through regulation, support, or agreements with other countries, Indian exporters will continue to struggle.