Vietnam & Bangladesh benefit more as US diverts apparel imports from China

As US firms partially moved away from China for sourcing apparel as a response to trade tensions between the two countries, it’s not India which is benefited the most but Vietnam and Bangladesh, as their share increased by 7.8 per cent and 3 per cent respectively.

On the contrary, India’s share increased only by 1.8 per cent. A study conducted by the United States International Trade Commission (USITC) on export competitiveness of certain foreign suppliers to the US indicates that the shares of major suppliers to the US market changed significantly between 2013 and 2023.

During 2013-23, the US was the largest single-country apparel importer in the world, sourcing the majority of its apparel from Asia.

The US imported $79.3 billion worth of apparel in 2023, accounting for about one-fifth of global imports.

China was the largest supplier to the US market during the entire period, although its share of imports dropped by 16.4 percentage points (37.7 per cent to 21.3 per cent).

Vietnam was the second-largest supplier during 2013-23, and its share of US apparel imports rose by 7.8 percentage points (10 per cent to 17.8 per cent) over the same period.

The two largest sources of US apparel imports by value were China and Vietnam, which together accounted for 39 percent of all US apparel imports in 2023.

Among the others, Bangladesh was the largest US supplier by value, supplying 9.0 per cent of US apparel imports ($7.1 billion), followed by India ($4.6 billion), Indonesia ($4.2 billion), Cambodia ($3.4 billion), and Pakistan ($2.1 billion). According to the report, compared to other regional suppliers, India is reportedly a costlier sourcing destination for apparel.

The report further highlights that India’s large number of MSMEs has hindered efforts to achieve economies of scale. The country’s large domestic market makes exporting to the global market less attractive to firms because of the additional costs related to exporting. Additionally, some US brands and retailers have concerns about long transit times to destination for final goods.

The US is India’s top export market, accounting for 32 per cent of India’s $14.5 billion in global apparel exports in 2023.

That year, the US imported apparel worth $4.6 billion from India, up from $4.0 billion in 2018 and $3.2 billion in 2013.

From 2016 to 2023, India was consistently a top five supplier of apparel to the United States and the tenth-largest supplier of apparel to the world.