The US-Bangladesh trade deal that includes a component on textile exports has raised concerns in India. In the agreement, Washington “committed to establishing a mechanism for certain Bangladeshi textile and clothing products that use cotton and man-made fiber produced in the United States to receive a zero reciprocal tariff in the US market,” said Muhammad Yunus, chief adviser to Bangladesh’s interim government.

“Don’t bemoan the loss of really low-end textile exports. Our textile hubs will learn to sell locally, where there is demand, or shift to higher-tech manufacturing. Most fears are unfounded… Life always finds a way,” said Deepak Shenoy, CEO, Capitalmind AMC.

The government had earlier said, before the Bangladesh-US trade deal was announced, that the India-US trade deal will open up the US$118 billion global import market for textiles, garments and apparel, a “huge opportunity” for India’s textile industry.

The United States is the main market for Indian textiles. At that time, India had allegedly gained a more favorable position than its competitors who had a higher tariff, such as Bangladesh at 20 percent, China at 30 percent, Pakistan at 19 percent and Vietnam at 20 percent.

The government had said last week that the trade deal would alter market dynamics as major buyers would likely revise their sourcing in light of the deal.

Meanwhile, the opposition has criticized the government for raising US tariffs to 18 percent, up from 3 percent before US President Donald Trump’s regime. “Textiles at 3% tariff before Trump are higher than 18% after the deal, according to the logic of India’s commerce minister. We were told to applaud this brilliant deal,” Shiv Sena (UBT) leader Priyanka Chaturvedi said.

“The US has now signed a trade deal with Bangladesh in which the US has committed to a mechanism for textile and apparel products using US cotton or Bangladeshi man-made fiber with a zero reciprocal tariff in the US market. India’s commerce minister will now tell us how much benefit Indian textile exporters will get with an 18% tariff on Bangladesh,” he said.

Separately, according to the India Brand Equity Foundation, India exported $578.64 million of cotton yarn, $564.83 million of Indian cotton, not carded or combed, of a staple length of 28.5 mm (14/32″) and over but below 34.5 mm, and $416.49 million of cotton, without 8 cents or 5 cents per cent nor percent of sales plus cotton in fiscal year 25.