Asia holds the thread: Regional textile powers reinvent strategies amid global slowdown

While 2024-2025 financial results show a slowdown in consumption in several Asian countries – particularly for luxury groups like LVMH – the global textile sector continues to rely on the region. Several indicators from the first half of 2025 confirm Asia’s central role in global value chains.

Between export growth, structural adjustments, margin pressure, regulatory reforms and partial relocation strategies, Asia remains a strategic pillar of international textile production. Its internal balances are being redefined due to growing competition between its major manufacturing powers.

China: resilient leadership under constraint

China, the undisputed heavyweight of the global textile industry, exported 143.97 billion dollars worth of textiles and clothing in the first half of 2025, according to Chinese customs data. This volume confirms the strength of its export position, despite a deteriorating domestic environment and sluggish domestic consumption.

This is explained by several factors: a highly integrated supply chain, efficient logistics capabilities, and rapid adaptation to the traceability and sustainability requirements of Western clients. In other words, China is offsetting its domestic slowdown with increased export aggressiveness, while adapting to new international standards, particularly in terms of ESG. Faced with rising costs and regulatory pressures, some Chinese companies are starting to relocate their units inland or outsource to Southeast Asian partners.

India: local dynamism and trade diplomacy

In India, the renewed demand observed in Ludhiana, a key cluster in the textile sector, reflects a gradual recovery in domestic consumption, driven by the post-election effect and more stable macroeconomic prospects. Cotton yarn prices are rising there, a sign of a restarting industrial activity, according to the Times of India. The real leverage could come from public policies. The project of “rating textile companies to facilitate access to credit”, considered by the Ministry of Textiles, and mentioned by the Business Standard, is part of a logic of structuring the sector, aiming to strengthen its bankability and attractiveness for investors.

At the same time, the free trade agreement between India and EFTA, applicable from October 1, 2025, constitutes a major geo-economic lever. It allows India to diversify its markets in the face of Chinese competition, notably by targeting the Swiss and Norwegian markets. All of these initiatives are part of a broader strategy to make India a credible alternative to China in the global supply chain.

Japan: a mature, but essential market

Japan confirms its status as a strategic, high value-added market for Asian exporters. With 12.1 billion dollars of clothing imports in the first six months of 2025 (plus 6.8 percent), demand remains strong, despite a generally gloomy economic context. This dynamic is based on stable purchasing power, a strong appetite for fashion, and very low domestic production, which makes the country structurally dependent on imports, particularly from China, Vietnam and Bangladesh.

Bangladesh: logistical vulnerability and ongoing trade-offs

Bangladesh, the world’s second largest clothing exporter, is facing a significant increase in logistics and port handling costs, according to the BGMEA. These tensions, coupled with growing pressure from brands on purchase prices, are weakening its relative competitiveness. This could encourage some brands to rebalance their sourcing towards Southeast Asia (Vietnam, Indonesia, Cambodia), or even towards East Africa or nearshoring circuits closer to Europe.

Despite these challenges, the country still benefits from a comparative advantage in labour costs, and a proactive policy of modernising its infrastructure. The window of opportunity is narrowing. Bangladesh must imperatively accelerate its move upmarket and its ESG transition if it wants to avoid being marginalised by more flexible and less exposed competitors.

An ever-essential region

The combination of these national dynamics illustrates an overall movement, where Asia is becoming a differentiated economic space, where each country seeks to consolidate its assets – export capacity, industrial base, access to finance, trade agreements – to maintain or strengthen its place in the global value chain.

For European and American brands, it is no longer a question of choosing Asia as a bloc, but of composing a dynamic supply portfolio, combining logistical reliability, regulatory alignment and local business opportunities. In any case, sourcing agility, the ability to adapt to ESG standards, and a thorough understanding of bilateral agreements will be decisive assets for purchasing departments in the fashion and textile sector.