Indian Textile Sector Rattled by Bangladesh-US Strategic Trade Deal

A report by 'The Hindu' highlights that Indian exporters are deeply unsettled by the duty-free access granted to Bangladeshi garments in the US market—a move that nullifies India’s previous competitive advantage. The deal introduces a reciprocal mechanism where Bangladesh can export finished apparel duty-free to the US, provided the products are manufactured using raw materials like cotton or synthetic yarn imported from America. This poses a direct threat to India’s cotton yarn exports to Bangladesh, which currently stands as its largest market, valued at $1.47 billion annually.

Industry bodies, including the Confederation of Indian Textile Industry (CITI), have voiced concerns that India could lose its grip on high-demand cotton-based products like T-shirts and women’s tops. While some experts argue that Bangladesh's ongoing energy crisis and the logistical costs of sourcing raw materials from the US might delay the full impact, the overall sentiment remains one of high alert. Indian trade leaders are now mounting pressure on the Indian government to negotiate similar reciprocal duty-free arrangements with Washington to ensure a level playing field. They warn that without such intervention, the restructuring of the global supply chain in favor of Bangladesh could permanently sideline Indian apparel exports in the United States.