A recently signed trade agreement between Bangladesh and the United States has sparked significant concern among Indian textile and apparel exporters, who fear the deal may undermine their competitive position in the American market. An in-depth report by The Hindu notes that the development has created uncertainty for Indian suppliers who had expected to benefit from the 19% import duty imposed on Indian products—a duty Bangladesh has not been required to pay.
According to the agreement, the United States has committed to establishing a mechanism that would allow specific categories of Bangladeshi garments and textile products to enter the American market duty-free. The extent of this zero-tariff access will depend on how much cotton or man-made fiber Bangladesh imports from the United States. The more raw materials Bangladesh purchases from the U.S., the greater the volume of apparel it will be allowed to export duty-free.
India currently serves as Bangladesh’s largest supplier of cotton yarn, exporting USD 1.47 billion (570 million kilograms) worth of the material in the 2024–25 fiscal year. India also shipped 1.2–1.4 million bales of cotton to Bangladesh last year. Approximately 20% of Bangladesh’s total apparel exports and 26% of India’s cotton-based garment exports are destined for the United States.
Chandrima Chattopadhyay, Secretary General of the Confederation of Indian Textile Industry, warned that the deal could immediately pressure India’s cotton-yarn industry, as Bangladesh could begin sourcing cotton directly from the U.S. and producing yarn domestically.
K. M. Subramanian, President of the Tiruppur Exporters Association, raised questions about traceability. He argued that a Bangladeshi exporter using only 10% U.S. cotton might claim to have used 100%, challenging America’s ability to verify the true origin of raw materials. Given Bangladesh’s strengths in garment manufacturing, he said, Indian exporters could face losses.
Sanjay K. Jain, Chair of the National Expert Committee on Textiles at the Indian Chamber of Commerce, added that the agreement would likely increase Bangladeshi apparel exports to the U.S. Bangladesh produces both knit and woven garments, he said, posing a threat to India’s market share in key cotton-based categories such as T-shirts and women’s tops.
However, several industry voices believe the practical impact may be far more limited.
A Coimbatore-based exporter noted that many Bangladeshi textile mills are currently struggling with electricity shortages, which could make U.S.-sourced cotton less cost-effective. Bangladesh neither grows cotton nor produces man-made fibers; to receive duty-free access, the country would need to import these raw materials entirely from the United States. Transport, storage costs and the limitations of using U.S. cotton for all product types would further complicate the transition, requiring supply-chain changes that cannot occur overnight.
“This is almost like returning to the quota era before 2000,” the exporter said, highlighting the logistical challenges Bangladesh would face.
Siddhartha Rajagopal, Executive Director of India’s Cotton Textiles Export Promotion Council, said the Indian government should push for a similar arrangement with the United States to ensure parity for Indian exporters. A. Sakthivel, Chairman of the Apparel Export Promotion Council, echoed the call, stating that equal treatment for India was essential.
Source: The Hindu.