India has spent the past several years becoming a more important piece of brands’ sourcing diversification strategies. Its massive workforce, political stability and vertically integrated textile industry offered buyers an alternative as they looked to reduce their dependence on China. In 2025, U.S. apparel imports from India rose 5.45% to nearly $5 billion, even as imports from China plunged more than 35%.
But the competitive equation is getting more complicated.
Tariffs are creating new uncertainty around India just as other apparel-producing countries are gaining ground. Bangladesh, Cambodia and Indonesia currently face the same 10% U.S. Section 301 forced-labor tariff as India, but all three have access to a tariff-rate quota mechanism tied to purchases of U.S. cotton and textile inputs. India does not. With another Section 301 investigation potentially adding duties tied to excess capacity, the eventual cost gap between sourcing countries remains difficult to predict.
That puts greater pressure on India to capitalize on advantages beyond price. New data from WRAP, the facility-based social compliance certification organization, suggests social compliance could be one of them.
Of the 356 Indian factories WRAP audited in 2025, 67% required a Corrective Action Plan (CAP), compared with 93% across WRAP’s global audits. The gap with several major apparel competitors was even wider: 100% of audited factories in Bangladesh and Cambodia required CAPs, as did 97% in Indonesia. (Download the report here.)
Indian factories also recorded fewer non-compliances per CAP than the WRAP-wide average. The findings suggest that, among the facilities WRAP audited, Indian suppliers entered audits with fewer compliance problems requiring remediation than their peers.
The data also reveal where India still has work to do.
Health and safety generated the greatest number of findings, particularly around emergency exits, personal protective equipment and machine guarding. Security was another weak spot, with problems involving visitor and worker identification logs, CCTV coverage and broader security-program governance. These are largely operational and management-system issues, making them potentially more straightforward to address than some entrenched labor challenges.
At the same time, some of the most serious social compliance concerns appeared relatively infrequently in WRAP’s audits. Child labor generated just one finding. Forced labor accounted for 10 findings, primarily involving language barriers around employment contracts and incomplete hiring documentation.
India’s vertical supply chain could offer another advantage as forced-labor scrutiny moves deeper into raw-material sourcing. The country is a major cotton producer and has had relatively little apparel, footwear and textile product detained under the U.S. Uyghur Forced Labor Prevention Act. However, growing imports of Chinese synthetic yarns and fabrics could increase exposure, while allegations surrounding labor practices in domestic cotton production remain an area requiring due diligence.
The bigger question, then, may not be whether India can compete on social compliance. WRAP’s data suggest it already performs well against several major sourcing rivals. The question is whether that advantage will be enough to offset a trade environment that could make Indian apparel more expensive for U.S. buyers just as the country is trying to capture a larger share of global sourcing.
