Union Commerce Minister Piyush Goyal’s announcement that India could receive a zero per cent tariff deal from the US on textiles, just like Bangladesh, has sent the Bangladesh garment industry into a tizzy. Under the new India-US trade deal, India will get zero-tariff access to the US market for clothes made using American cotton.
The announcement has sparked fears in the neighbouring country, with exporters there fearing that the development could take away Bangladesh’s edge in the garment exports to the US. They fear that the step taken by India could keep its garment industry competitive against regional rivals. “Bangladesh may lose its competitiveness to some extent in the US markets if similar trade benefits are extended to Indian exporters,” Anwar-ul-Alam Chowdhury, former president of the Bangladesh Garment Manufacturers and Exporters Association, told Daily Star Bangladesh.
He cites India’s lower production costs, favourable customs treatment and robust government support for the textile sector as factors that could favour India. “India is in an advantageous position in terms of cost of production, but equally treated by the US customs, and facilities offered by the Indian government to the textile and garment exporters,” he added.
However, the Bangladeshis are now clinging to the hope that the fact that India is a cotton exporter and not an importer like Bangladesh could come to its rescue. India is the world's second-largest exporter of raw cotton, with exports valued at over US$ 6.4 billion in FY 2024-25, driven by demand from Bangladesh, China, and Vietnam. India is also a major importer of US cotton, with imports reaching roughly 4.13 million bales in 2024–25.
According to Showkat Aziz Russell, president of the Bangladesh Textile Mills Association, the Trump administration’s tariff cut will be applicable only for importers of cotton. “India imposes a 12 per cent duty on cotton imports, while Bangladesh has zero duty on cotton imports. So Bangladesh can enjoy better benefits as Bangladesh is a major importer of cotton,” he told Daily Star.
While this could be a valid reason, this benefit could be offset by Bangladesh’s dependence on imports. Bangladesh’s import dependence means the cost of production in Bangladesh is higher than in India, according to experts.
But India has been steadily taking over the market, with figures stating that 77 per cent of the US fashion brands and retailers sourcing material from India in 2025 and this could continue through 2027.
