Indian Garment Exports Fall as US Buyers Demand Discounts

Indian readymade garment exports declined for six consecutive months, with May 2026 seeing a 14.1% year-on-year shrinkage in USD terms. K.M. Subramanian, president of the Tirupur Exporters Association, attributed the downturn to weak demand in the United States, cautious retail buying, and increased competition from Vietnam, Indonesia, and Cambodia.

Exporters are currently facing significant pricing pressure for the Spring 2027 season, as US buyers demand discounts between 5% and 10%. While the depreciation of the Indian rupee has partially cushioned the impact, industry leaders note that competitors are capturing market share through better cost competitiveness. To mitigate these losses, Indian firms are attempting to diversify trade toward the UK, UAE, Germany, Spain, and Italy.

Industry optimism has emerged following a peace deal between the United States and Iran, which is expected to reduce raw material costs and resolve war-related uncertainties in West Asia. The Confederation of Indian Textile Industry anticipates a recovery in orders starting with the summer cycle in August. Despite this, analysts predict a sequenced recovery, with revenues likely falling 3-9% in FY26 before rebounding in FY27.