US Holiday Orders for Indian Garment Exporters Decline 25–30%
Improved demand from the UK and Europe offers some relief, while tariff uncertainty, inflation and shipping disruptions continue to affect export orders.
Indian ready-made garment (RMG) exporters are facing a 25–30% decline in orders from the United States for the Christmas and New Year shopping season. Improved demand from the UK and Europe is providing some relief, but uncertainty over tariffs, inflation and longer shipping routes continues to weigh on the industry.
US Demand Weakens Ahead of Holiday Season
High inflation in the US and geopolitical uncertainties have made buyers more cautious about holiday-season purchases, prompting major customers to reduce orders, according to industry sources. The slowdown has affected India's apparel export performance in dollar terms during the first half of the current financial year.
According to the Apparel Export Promotion Council (AEPC), RMG exports in September 2026 rose 13.7% year-on-year to $1.1 billion. However, cumulative exports during April–September 2026–27 declined 6.2% to $7.2 billion, compared with $7.7 billion in the corresponding period of the previous fiscal year.
In rupee terms, exports in September increased 22.9% year-on-year to ₹10,824.6 crore. During the first six months of the fiscal year, exports rose 3.4% to ₹69,300 crore from ₹67,001 crore.
“We have seen a 25-30 per cent decline in export orders for Christmas and New Year to the US,” said a large RMG exporter in Tiruppur.
Orders for the year-end season in the US and Europe typically begin translating into shipments in September and October. This year, exporters started shipping earlier to ensure garments reached retail shelves by November, as diversions around the Cape of Good Hope instead of the Suez Canal extended transit times, industry sources said.
Tariff Uncertainty and Shipment Pressures
Ramu Shanmugam, CEO of Clothing Connections and Chairman of the IT Wing Subcommittee of the Tiruppur Exporters’ Association (TEA), said September and October are traditionally important order and shipment periods as buyers prepare for Christmas, winter and early-spring selling seasons.
Compared with September 2025, when the US tariff shock disrupted trade, new orders from American buyers were being delayed or renegotiated this year, he said.
“Exporters lost many customers and orders or were busy doling out substantial discounts to save the factory from shutting down,” he told businessline.
The combination of reduced orders and longer shipping routes has added pressure on exporters preparing for the peak retail season.
UK and European Markets Offer Relief
Despite weaker US demand, improved order traction from the UK and Europe has provided some optimism for Indian garment exporters.
Shanmugam said September's export growth indicated a better order environment than the uncertainty experienced during the corresponding period last year, although buyers remain price-sensitive and cautious about commitments.
“Last year the tariff was a major issue. This year, with the FTA in place for the UK and positive news on the EU FTA, there is good traction from customers. Overall, it is positive,” said R Rajkumar, Vice-Chairman and Managing Director of Best Corporation (P) Ltd, Tiruppur.
Freight Costs and Trade Risks Remain Concerns
A Sakthivel, Chairman of AEPC, said India's apparel exports were facing pressure from two directions.
Exports to the US were declining sharply, with the possibility of additional tariffs adding to concerns. In the European Union, demand remained firm, but shipments to the region were particularly exposed to logistics disruptions. Freight costs had more than doubled, while risks in the Red Sea continued to affect shipping.
With maritime trade through the Suez Canal gradually recovering over the previous month, RMG exporters are hopeful that conditions could improve during the second half of the current fiscal year.