5 Reasons Why US Brands Are Shifting Manufacturing From China To India In 2025 & Why You Should Too

There are significant geopolitical tensions between the world’s most popular manufacturer (China) and the world’s largest consumer market (the United States) in 2025. The rising trade tariffs imposed by both countries have made it impossible for businesses to continue trading.

This has opened the market for new industries and countries to replace China’s monopoly. Among the popular options, such as Bangladesh, Pakistan, and India, India has stood out as the top replacement. So, why are US brands shifting manufacturing from China to India in 2025? And why is India the best garment manufacturer for US businesses looking for affordable manufacturing in Southeast Asia? Let’s answer both these questions in this piece.

5 Reasons India is Dominating The Shift From Chinese Manufacturing For US Brands

Long-standing Infrastructure & Manufacturing Industry

India has been a major manufacturing hub for almost as long as China. The garment and textile manufacturing industry in India has flourished for centuries. Garment export to other countries was one of the primary reasons Europeans came to India for trading. So, the presence of existing infrastructure and quality garment manufacturing capabilities is a primary reason US brands are shifting to India.

Compared to other neighboring countries like Bangladesh, India has a larger manufacturing capability with more skilled labor who are ethically treated. Thanks to India’s position as a major country in Southeast Asia, they have become the default replacement of China. This also supports the China +1 policy that’s adopted by numerous US brands.

Specialization in Cotton and Natural Fibre Manufacturing

India is not just a manufacturer; the country is also one of the largest producers of cotton and natural fibres in the world. Cotton, especially organic cotton, is one of the most in-demand fabric options in the global garment market, and as such, it makes sense for brands to manufacture garments right from the source of raw materials. It saves production costs and allows brands to source high-quality organic cotton without additional shipping costs. Be it white-label manufacturing or private-label clothing, India’s dominance over natural fibre manufacturing is a leading reason eco-conscious US brands have shifted manufacturing to India over China.

Increased Manufacturing Costs in China

China is slowly shifting towards exclusively manufacturing high-end goods and garments. This means they’re slowly letting go of contracts where they were required to mass manufacture at low costs. This practice has increased production costs for brands in China. They’re now required to either pay a premium for Chinese cloth manufacturing or opt for other options.

India has become a great alternative here since the Indian manufacturing costs have remained the same throughout, with no sudden rise, allowing businesses to keep their manufacturing costs in check. Additionally, India has the capability to produce better

quality products compared to China, which has also helped brands choose India over China.

Rising Geopolitical Tensions Between The US & China

There is an ongoing trade war between India and China, and that has led to difficulties in trade practices between the two countries. As a result of this turmoil, other countries are now being chosen as alternatives because of the hurdles required to work with China. India has come out on top in this scenario as one of the largest economies in the world, with an abundance of affordable, skilled labor and high-quality garment manufacturers and raw materials.

Easy Availability of Ethical and Sustainable Manufacturing Facilities

The Indian government and the apparel industry as a whole have taken numerous steps to prevent the exploitation of skilled labor. The government has also created incentivized programs to promote the local garment manufacturing industries that specialize in traditional Indian garment styles. These programs allow US brands to access high-quality, traditionally rich, small quantity manufacturers right from the source with a currency exchange benefit.

Conclusion

These are some of the top reasons why US brands are shifting to India from China. As a major manufacturing hub with an abundance of skilled labor and international infrastructure, India has become the top choice in Southeast Asia for garment manufacturing. For more information about clothing manufacturers for startups in the US based in India, check out Cheer Sagar. Cheer Sagar is among the top garment export and manufacturing companies in India, based in Jaipur.

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5 Reasons Why US Brands Are Shifting Manufacturing From China To India In 2025 & Why You Should Too