India is likely to receive Bangladesh-style zero-duty benefits on US cotton imports, according to the Commerce Ministry.
India will receive yarn- and cotton-linked trade advantages comparable to those granted to Bangladesh, the Commerce Ministry has clarified, offering potential relief to domestic textile and apparel exporters. The ministry stated that once the proposed agreement is concluded, Indian exporters will be eligible for zero-tariff access on garments manufactured using cotton sourced from the United States. The provision is aimed at maintaining competitive parity with neighbouring exporting nations while strengthening India–US trade relations.
The clarification comes amid political debate surrounding the trade framework. Addressing claims made by Lok Sabha Leader of Opposition Rahul Gandhi, Union Commerce Minister Piyush Goyal dismissed suggestions that Bangladesh had secured more favourable terms than India.
He explained that Bangladesh currently benefits from a system under which garments produced using US-origin raw materials and exported back to the US attract zero reciprocal tariffs. India, he said, will be entitled to the same benefit under its forthcoming agreement. Goyal added that while the framework agreement is under preparation, the provision would be evident once the interim deal is finalised.
The commerce minister also stressed that the broader arrangement safeguards India’s agricultural sector. He noted that around 90–95% of Indian farm products have been excluded from the trade deal, ensuring farmer interests remain protected.
The statement follows a joint announcement by the US and Bangladesh on 9 February 2026, under which Washington agreed to lower reciprocal tariffs on Bangladeshi goods to 19%, while allowing zero-duty access exclusively for garments made using US-origin cotton and man-made fibres.
Goyal clarified that Indian manufacturers sourcing cotton or yarn from the US, producing garments domestically, and exporting them to the American market would also qualify for duty-free treatment. He underlined that this would not negatively impact Indian cotton growers, pointing out that US cotton exports are limited, while India is targeting exports worth USD 50 billion.
The assurance is expected to ease industry concerns that Bangladesh could gain a competitive advantage in the US apparel market under the revised tariff regime.
News Courtesy : Times of India