US Apparel Buyers Resume Sourcing from India, Seek 5–10% Price Discounts

Improved sentiment after US-Iran truce boosts enquiries, but lower price offers continue to pressure Indian garment exporters

Apparel exporters in India are witnessing renewed enquiries from US buyers following improved prospects of a US-Iran truce. While buying activity has resumed, exporters say buyers are negotiating lower prices, seeking discounts ranging from 5% to 10% across apparel categories.

K.M. Subramanian, president of the Tirupur Exporters Association (TEA), said:

“Enquiries are coming, but US buyers are offering lower prices.”

India's readymade garment (RMG) exports declined for the sixth consecutive month in May, with year-on-year exports falling 14.1% in May 2026, primarily due to weaker demand from the United States, India's largest apparel export market. The US accounts for nearly one-third of India's total apparel exports.

Sudhir Dhingra, owner of Orient Craft, said buyers placing orders for the Spring 2027 season are demanding discounts of up to 10%. He noted that Indian exporters have limited flexibility in pricing because competing sourcing destinations such as Vietnam, Indonesia and Cambodia have been more successful in benefiting from the China-plus-one sourcing strategy.

Industry executives attributed the stronger performance of these competing countries to better cost competitiveness, more diversified product offerings, efficient supply chains, shorter lead times and higher buyer confidence. Since the US represents nearly one-third of India's apparel exports, demand trends and pricing in that market remain significant for the sector.

K.M. Subramanian said:

“India’s decline in exports can be attributed to a combination of weaker US demand, cautious retail buying and increased competition from other countries.”

He added:

“While the RMG exports fell by 14.2% in USD terms during May 2026, the decline in Indian currency was relatively lower at 3.6%, indicating that the exchange rate movements partly cushioned the impact.”

He further noted that, year-on-year, the Indian rupee has depreciated by around 9.8% against the US dollar, moving from the mid-₹80s into the mid-₹90s.

Despite the overall decline in garment exports, shipments to several important markets, including the UK, UAE, Germany, Spain and Italy, have recorded growth as India continues to diversify its export destinations.

Sudhir Dhingra said that the Free Trade Agreements with the UK and Europe have provided some encouragement to apparel exporters.