India Eyes Zero-Duty Textile Access to US, Easing Pressure from Bangladesh Advantage

By Admin

13 Feb, 2026

India’s textile industry may soon witness a major boost as the government explores securing zero-duty access for textile exports to the United States. The move aims to neutralize the competitive edge currently enjoyed by Bangladesh in the US market and strengthen India’s position as a global textile powerhouse.

Commerce Minister Piyush Goyal recently indicated that India is working towards a similar tariff relief arrangement with the US administration. The announcement has generated optimism across the textile sector, particularly among exporters concerned about rising competitive pressure.

Strengthening India’s Position in the US Market

During a meeting with textile industry leaders at Vanijya Bhawan, the Commerce Minister assured stakeholders that India is actively exploring a zero-duty arrangement with the United States. A trade deal is expected to be finalised by the end of March.

Under preliminary US tariff guidelines, countries that incorporate at least 20 percent US-origin raw materials in the import value of finished goods may qualify for zero-duty access when exporting to the US. Importantly, this provision is not exclusive to Bangladesh and can also apply to India.

Industry representatives present at the meeting expressed confidence that such a deal would eliminate fears of losing market share to Bangladesh or concerns over declining cotton exports.

Understanding the Bangladesh Advantage

Bangladesh has enjoyed certain tariff benefits in the US market, helping its garment exports remain highly competitive. The potential US arrangement initially sparked speculation regarding its impact on India’s cotton trade with Bangladesh.

Bangladesh imports around 8.5 million bales of cotton annually to support its spinning mills. Major suppliers include Brazil, India, and African nations. Interestingly, Bangladesh has not been a significant importer of US cotton in recent years.

India exports approximately 1.2 million bales of cotton annually to Bangladesh. With domestic production of around 37 million bales and imports of nearly 5 million bales to balance supply-demand gaps, India is not considered surplus in cotton availability.

Therefore, fears that India would lose cotton export volumes to Bangladesh appear overstated.

Cotton Trade Dynamics and Domestic Implications

India’s cotton ecosystem remains tightly balanced. Bangladesh’s yarn production is insufficient to support its vast garment manufacturing industry, forcing it to import yarn and fabrics in addition to cotton. At the same time, Bangladesh is expanding its presence in man-made fibre production.

For India, the scenario suggests steady export opportunities while domestic consumption is likely to increase if textile production expands under favorable trade agreements.

Industry experts believe that limited scope for immediate increases in cotton productivity or acreage could lead India to import more cotton in the future rather than reduce imports. This shift could ultimately benefit Indian cotton farmers by improving price realisations and encouraging cultivation expansion.

Growth Prospects Under FTAs

India’s textile growth story is closely tied to its expanding trade network. The country has signed free trade agreements (FTAs) with the United Kingdom and the European Union, and a US trade pact is anticipated soon.

As these FTAs come into effect:

• Capacity expansion in spinning, weaving, and processing is expected to accelerate
  
  

• Domestic cotton consumption is likely to increase
  
  

• Supply may tighten due to rising demand
  
  

• Export competitiveness will significantly improve
  
  

The anticipated US zero-duty access arrangement would further reinforce India’s competitive standing in global textile markets.

Safeguarding Exporters and Cotton Producers

If finalised, the US trade arrangement will not only protect India’s textile exporters from losing ground to Bangladesh but also safeguard domestic cotton producers. Stronger export demand, coupled with expanding manufacturing capacity, could drive long-term sectoral growth.

The development signals a strategic shift in India’s trade diplomacy   ensuring that the country remains competitive, resilient, and future-ready in the global textile landscape.

With policy alignment, expanding FTAs, and potential US tariff relief, India’s textile sector appears poised for a new phase of growth and global leadership.