India set to get Bangladesh-style zero-duty access in US for cotton-based textile exports: Piyush Goyal

India-US Trade Deal: India’s textile and apparel exporters could soon get the same tariff advantage that Bangladesh has secured from the United States, Commerce Minister Piyush Goyal said on Thursday, seeking to calm fears of an uneven playing field in the crucial American market. Goyal indicated that a proposed India-US trade framework is expected to include provisions under which Indian fabric and garment shipments made using US cotton or certain raw materials could enjoy zero reciprocal duty. The minister said the fine print will become clear once the interim agreement is finalised, adding that the government has ensured Indian farmers, especially cotton growers, will not be harmed by the deal.

Why Bangladesh’s US tariff deal triggered concerns in India?

The issue gained attention after the US and Bangladesh issued a joint statement on February 9 announcing significant tariff relief for Bangladeshi exports. Under the arrangement, reciprocal tariffs on Bangladeshi goods were reduced, and special textile and apparel products made with US cotton and man-made fibre were granted zero-duty access.

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This immediately raised worries among Indian exporters that Bangladesh could gain a pricing advantage in the US, potentially diverting orders away from Indian manufacturers already facing stiff competition from other Asian suppliers.

India likely to get the same zero-duty facility

Responding to these concerns, Goyal said India would not be left behind. He explained that India too will have a similar facility under which textiles produced from US-origin yarn, cotton or raw material and exported back to America could attract no reciprocal tariff.

“India also has the same facility and India will also get it,” the minister said, adding that discussions are underway and the framework agreement is currently being prepared.

For Indian exporters, especially in garments, home textiles and value-added apparel, such a provision could improve competitiveness and reduce cost pressures in one of their largest overseas markets.

Political sparring in Parliament over Bangladesh comparison

The trade discussion has also sparked a political clash. Leader of Opposition Rahul Gandhi alleged that Bangladesh had secured better terms than India in its engagement with the US.

Goyal strongly rejected the charge, calling it misleading and insisting that the same benefits would be available to India once the agreement is concluded. He accused the Opposition of spreading confusion at a time when negotiations are still evolving.

Farmers’ interests protected, says Commerce Minister

A key domestic worry around any trade liberalisation is the potential impact on Indian agriculture and rural livelihoods. Goyal sought to reassure farmers, stating that the government has ring-fenced the farm sector in the negotiations.

He said nearly 90 to 95 per cent of India’s agricultural products have been kept outside the scope of the trade deal, ensuring that cheap imports do not flood the domestic market.

The minister also stressed that cotton farmers would not face losses, even as the deal could encourage the use of US cotton in export-oriented textile manufacturing.

What the India-US interim trade deal could mean?

India and the US have been working towards an interim trade agreement framework, with expectations that the detailed terms could be known in the coming weeks.

The broader bilateral trade ambitions remain significant, with both sides targeting a sharp expansion in trade volumes by 2030. Textiles are expected to be one of the key sectors where India could gain if duty barriers are lowered.

If the zero-duty access provision is implemented, it could provide a major boost for Indian garment hubs, strengthen exports, and ease concerns after Bangladesh’s head start.