Kolkata | Pune: As prospects of a US-Iran truce brightened, US buyers have resumed enquiries with Indian apparel exporters. However, buyers are seeking discounts of 5%-10% across apparel categories, putting pressure on already-thin exporter margins.
“Enquiries are coming, but US buyers are offering lower prices,” said K.M. Subramanian, president of the Tirupur Exporters Association (TEA).
India’s readymade garment (RMG) exports have declined for the sixth consecutive month in May, shrinking the year-on-year growth by 14.1% in May 2026 primarily due to weaker demand in the United States, India’s largest apparel export market. The US accounts for nearly one-third of India’s total apparel exports.
Owner of Orient Craft Sudhir Dhingra said for orders for the Spring 2027 season buyers are demanding discounts of up to 10%. Indian exporters have little choice but to accept the terms as competing sourcing destinations such as Vietnam, Indonesia and Cambodia have been more successful in capitalising on the China-plus-one opportunity.
Industry executives attribute the stronger performance of these countries to better cost competitiveness, more diversified product offerings, efficient supply chains, shorter lead times and greater buyer confidence. The US accounts for nearly one-third of India’s total apparel exports, making demand trends and pricing pressures in the market critical for the sector.
“India’s decline in exports can be attributed to a combination of weaker US demand, cautious retail buying and increased competition from other countries,” said Subramanian.
“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 added. Year-over-year, the Indian rupee has lost around 9.8% of its value against the USD, shifting from the mid-₹80s into the mid-₹90s.
Despite the overall decline in garment exports, exports to several key markets like the UK, UAE, Germany, Spain and Italy have grown, as India tries to diversify its export destinations.
Dhingra said that the Free Trade Agreements with the UK and Europe have given some encouragement to apparel exporters.
