When Indian Commerce and Industry Minister Piyush Goyal announced on February 12 that India would receive the same concessional duty access on garment exports to the US as Bangladesh, alarm bells rang across Dhaka’s garment districts.
The Donald Trump administration’s proposal to offer zero reciprocal tariffs on garments made from US cotton and man-made fibre, previously a distinctive advantage for Bangladesh, will now extend to India as well, according to The Times of India.
Exporters fear the development might erode Bangladesh’s competitive edge in apparel shipments to the US to some extent. But experts paint a different picture.
“Bangladesh may lose its competitiveness to some extent in the US markets if similar trade benefits are extended to Indian exporters,” said Anwar-ul-Alam Chowdhury (Parvez), former president of the Bangladesh Garment Manufacturers and Exporters Association (BGMEA).
Parvez pointed to a cascade of Indian advantages: lower production costs, favourable customs treatment, and robust government support for the textile and garment sectors.
“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 said.
Mohammad Hatem, president of the Bangladesh Knitwear Manufacturers and Exporters Association (BKMEA), echoed these concerns.
He argued that if India receives the same trade benefit, “Bangladesh’s competitiveness to the USA may be affected to some extent as Indian exporters enjoy more government facilities in the production of goods.”
EXPERTS SEE A DIFFERENT PICTURE
Not so fast, say industry analysts who point to a fundamental economic reality: India exports cotton, Bangladesh imports it.
“Bangladesh may not be affected too much in the US market even if the Indian exporters are given the same tariff benefit,” said Showkat Aziz Russell, president of the Bangladesh Textile Mills Association (BTMA).
His reasoning is straightforward. “The Trump administration said it will give the reciprocal tariff if the garment is made from imported US cotton and man-made fibre, but India is an exporter of cotton, not an importing nation.”
Russell highlighted another critical detail: India imposes a 12 percent 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.”
Zaidi Sattar, economist and chairman of the Policy Research Institute of Bangladesh (PRI), largely agrees.
“Primarily, it is observed that Bangladesh’s garment export to the US may not be affected too much because of the same facility being given to India. India is a cotton-exporting country, and Bangladesh is an importing nation.”
However, Sattar acknowledged a complication: Bangladesh’s import dependence means “the cost of production in Bangladesh is higher than in India.”
INDIA EXPANDS, BANGLADESH HOLDS FIRM
India has been steadily expanding its presence in the US apparel market, and the numbers are striking.
According to the US Fashion Industry Association’s (USFIA) Fashion Industry Benchmarking study in 2025, cited on February 6 this year by Vogue Business, 77 percent of surveyed US fashion brands and retailers reported sourcing from India in 2025, with 60 percent planning to expand sourcing through 2027.
India captured 6.5 percent of US apparel imports by value in the first 11 months of 2025, up from 5.7 percent in 2022, according to US International Trade Commission data.
The country has become the third-largest supplier of men’s cotton knit tops to the US market, behind Vietnam and Bangladesh, with strong performance in women’s blouses, babywear, and home textiles.
India’s apparel shipments to the US reached approximately $5.33 billion in fiscal year 2024-2025, roughly a third of the country’s total apparel exports.
A Sakthivel, chair of India’s Apparel Export Promotion Council (AEPC), told Vogue Business that if the proposed tariff reduction to an effective 18 percent is implemented, it could unlock as much as $3 billion in additional annual business.
Meanwhile, Bangladesh continues to gain ground. As the third-largest exporter by value, Bangladesh supplied approximately 10.6 percent of US apparel imports in the first five months of 2025, up from 9.2 percent during the same period in 2024.
In January-November of last year, garment exports from Bangladesh to the US rose to $7.60 billion, representing 12.43 percent growth compared to the same period in 2024.
The USFIA benchmark study showed that 53 percent of respondents expressed interest in expanding apparel sourcing from Bangladesh over the next two years, up from 48 percent in the 2024 survey.
US fashion companies generally regard Bangladesh as a leading sourcing destination for low-cost, bulk items, particularly basic categories such as knit cotton shirts and trousers.
THE REAL VULNERABILITIES
Perhaps the more pressing concerns for Bangladesh lie elsewhere. Despite cost advantages, sourcing from Bangladesh is still perceived to carry relatively high risks in terms of social and environmental compliance, according to the USFIA study.
More worryingly, respondents expressed concern that apparel imports from Bangladesh may face future US trade restrictions, likely due to the country’s growing trade surplus with the US and perceived heavy reliance on Chinese textile raw materials.
The evidence suggests the truth lies somewhere between exporter anxiety and expert reassurance. India’s tariff parity does create new competitive pressure, particularly given its lower production costs and strong government support.
But the structural economics, India’s role as a cotton exporter versus Bangladesh’s position as an importer, may blunt the immediate impact of tariff parity.
The real test will be whether Indian manufacturers find it economically viable to import US cotton despite their domestic supply, just to access the zero-tariff benefit.
