The United States signed a trade deal with Bangladesh on Monday, slashing tariffs on textiles and apparel goods using US cotton or man-made fibre from Bangladesh to zero; meanwhile, Indian textiles will be taxed at 18% under the recently concluded trade pact with the country. The opposition slammed the Indian government, highlighting the matter of tariffs on India now being higher than the previous 3%, and also above those imposed on the neighbour.
“Textile goods from 3% tariff pre-Trump is higher than 18% tariff post the deal, as per the logic of India’s Commerce Minister. We were told to clap for this genius deal,” Shiv Sena (UBT) leader Priyanka Chaturvedi alleged in a post on X.
She added that the US has now signed a trade deal with Bangladesh in which it has committed to establishing a mechanism for textile and apparel goods using US cotton or man-made fibre from Bangladesh at zero reciprocal tariff in the US market. “India’s Commerce Minister will now tell us the benefit Indian textile exporters will get with 18% tariff over Bangladesh’s 0%,” she wrote.
Putting the comment in context, the Maharashtra-based politician alleged that India imports US cotton worth $200 million while Bangladesh imports $250 million.
Congress commented on the US-Bangladesh trade deal saying it is a “bad news for India”. It alleged that major textile hubs like Tirupur, Surat, and Panipat will suffer with an 18% tariff disadvantage in the US market and risk of losing Bangladesh as a key buyer of Indian cotton and yarn.
“This trade deal weakens India’s textile industry and puts millions of livelihoods at risk,” the opposition party said, adding that the clause of zero tariff on textile and apperal goods delivers a double blow to the Indian economy as it hurts domestic cotton farmers and yarn spinners and makes life much harder for Indian garment exporters.
Bangladesh is currently a major buyer of Indian cotton, but this deal incentivises Bangladesh to shift to US cotton to avail zero-duty benefits, it alleged.
US-Bangladesh deal
Under the latest trade deal with US, Bangladesh has secured a reduced 19 per cent tariff that would exempt some textiles and garments manufactured with US materials, interim government chief Muhammad Yunus said.Announcing the trade agreement, Yunus said that Washington had “committed to establishing a mechanism for certain textile and apparel goods from Bangladesh using US-produced cotton and man-made fibre to receive zero reciprocal tariff in (the) US market”.
Commerce Secretary Mahbubur Rahman said that the agreement was signed in Washington by Commerce Adviser Sheikh Bashir Uddin and US Trade Representative (USTR) Jamieson Greer.
Commerce ministry officials said apart from cotton, the deal includes provisions for importing US wheat, soybean, and LNG, refraining from imposing tariffs on e-commerce, complying with US-mandated intellectual property rights standards, and supporting US proposals for reforming the World Trade Organisation (WTO).
As per data from Bangladesh’s Export Promotion Bureau (EPB), the US remains Bangladesh’s largest export market.
The development comes as Bangladesh heads for the general election on February 12 to choose new leadership and bring an end to the 18-month Yunus-led interim regime, which took charge after the fall of Sheikh Hasina’s Awami League government following a violent student-led protest dubbed the July Uprising.
