US-India deal will impact Bangladesh garment industry
By yash chouhan 2026-02-17 18:27:19
India’s Zero-Tariff Deal with US Jolts Bangladesh Garment Industry
India’s latest trade move has sent shockwaves through Bangladesh’s garment sector, raising concerns about losing its long-held competitive edge in the US market.
Union Commerce Minister Piyush Goyal announced that India could soon secure a zero per cent tariff deal on textile exports to the United States, similar to the benefits currently enjoyed by Bangladesh. Under the proposed trade pact, Indian-made garments using American cotton will get duty-free access to the US market.
The development has rattled Bangladesh’s exporters, who fear the move could erode their price advantage.
“Bangladesh may lose its competitiveness to some extent in the US markets if similar trade benefits are extended to Indian exporters,” said Anwar-ul-Alam Chowdhury, former president of the Bangladesh Garment Manufacturers and Exporters Association, in an interview with The Daily Star.
He noted that India’s lower production costs, smoother customs procedures, and strong government support give it a favourable position. “India is in an advantageous position in terms of cost of production, equal US customs treatment, and export facilities offered by the Indian government,” Chowdhury added.
Despite the concerns, Bangladeshi industry leaders hope that India’s status as a cotton exporter—unlike Bangladesh, which relies heavily on imports—might balance the scales.
India, the world’s second-largest exporter of raw cotton, shipped over US$6.4 billion worth of cotton in FY 2024–25, primarily to Bangladesh, China, and Vietnam. It also imported around 4.13 million bales of US cotton during the same period.
However, Showkat Aziz Russell, president of the Bangladesh Textile Mills Association, said the tariff concessions by the Donald Trump administration might only apply to cotton importers.
“India imposes a 12 per cent duty on cotton imports, while Bangladesh has zero duty. So, Bangladesh can still enjoy some advantages as a major importer of cotton,” he told The Daily Star.
Still, experts warn that Bangladesh’s dependence on imported raw materials keeps its production costs higher than India’s. Meanwhile, India continues to strengthen its foothold in the global textile supply chain. Industry data shows that 77 per cent of US fashion brands and retailers sourced materials from India in 2025 — a trend expected to continue through 2027.
