In this study, the non-local continuum damage model is further developed for progressive failure analysis of laminated composites. Characterized by two internal length scales, an orthotropic non-local integral strategy is implemented to model the constrained matrix damage along fiber direction. The introduction of spatial averaging may avoid spurious strain localization and thus ensure the physically-meaningful energy dissipation during damage evolution process. Compared to standard damage descriptions, the pathological mesh sensitivity and mesh orientation bias are effectively alleviated, leading to objective and accurate solutions. Moreover, an interactive damage transfer scheme is proposed to capture the strong interaction between matrix cracking and interface delamination, so that faithful predictions on the complex failure mechanisms of composite laminates are guaranteed. Performance of the present model and its superiority over conventional methods are demonstrated through several numerical examples, including the typical tensile failure of notched and unnotched laminates.