India textile edge threatened in US

Bangladesh's US deal could hurt India’s apparel exports and cotton yarn sales, warn experts

- Rajeev Jayaswal & Zia Haq

The competitive edge of Indian textile exports to the US may have narrowed, experts said, citing the 19% tariff on Bangladesh’s exports—just one percentage point above India’s 18% but with a duty-free option if these goods are manufactured from US cotton.

This incentive for Bangladesh to import US cotton could also hit India’s cotton exports to its neighbour. India exported cotton yarn valued at $3.57 billion in 2025, of which Bangladesh was the largest recipient, accounting for about 45.9% of its total yarn shipments.

Experts across trading houses, government departments and business lobbies said the devil lies in the details; both the US-India and US-Bangladesh framework agreements leave room for calibration before signing legally binding deal. The deals should be seen in their entirety rather than comparing sectoral gains, they added.

“Bangladesh has very significantly opened its economy to US in all areas that India has protected in exchange for slight gain in textiles,” one expert said on condition of anonymity.

New Delhi and Washington on Tuesday issued a framework for an interim bilateral trade agreement (BTA), likely to be signed by March. This reduces India’s total additional tariff in the US from 50% to 18% in exchange for lower tariffs on US industrial and agricultural goods and a commitment to reduce Russian oil imports.