Kate Nishimura | December 26, 2024

Since the pandemic, the apparel sourcing landscape has been mired in uncertainty.

Supply chain and logistics issues persisted throughout 2024, tariff threats loomed large and geopolitical tensions simmered, leading many sourcing executives to conclude that they need to be ready for anything, from hurricanes to Houthi attacks in the Red Sea.

Diversification has been a major part of that strategy in recent seasons. There’s been talk of nearshoring as a means of bringing production closer to the end market; some enthusiasm about Africa, and much concrete growth across East and South Asia, according to Dr. Sheng Lu, professor of apparel studies at the University of Delaware.

Lu spoke on a U.S. Fashion Industry Association (USFIA) webinar about his recent research.

“I found that most of the winners—the countries that enjoyed the fastest growth of their apparel exports to the U.S. market… from January to October, almost all of them are Asian countries,” he added.

India has been a major recipient of new business in 2024. Lu authored a study on India’s rise that was released earlier this fall, showing that the country is now being regarded as a “rising star” in the sourcing world due to several key factors.

“India makes more apparel than even Vietnam—and actually… it makes more textiles than Bangladesh,” he explained. While its output is still just a fraction of China’s, the country boasts a “more balanced textile to apparel production ratio, which means that India has a more vertically integrated regional supply chain.”

Countries like Bangladesh and Vietnam are still heavily reliant on China and other Asian markets for inputs, whereas India has the raw materials and upstream operations to facilitate more self-sufficiency. “And because of that, India has some very unique advantages,” Lu said.

Now the third most utilized clothing production base for U.S. companies, India exported about $15 billion worth of apparel in 2023.

While gains were modest, 2024 has also seen a 2.7-percent improvement in the utilization rate for the Dominican Republic-Central America Free Trade Agreement (CAFTA-DR), meaning that 73.2 percent of apparel and textile imports from the region enter the U.S. under the program.

“In the past, companies who have sourced from the region didn’t use the agreement often enough,” Lu said, meaning that they were not taking advantage of duty-free entry into the U.S. “But somehow, this year, the situation has changed; you can see the utilization rate improved.”

The problem? “The sourcing volume and sourcing value didn’t follow,” the professor said. In fact, CAFTA-DR members lost apparel market share in the U.S. even though more importers made use of the trade agreement.