The evolving trade dynamics between the United States, Bangladesh and India are poised to reshape the global textile and garment supply chain, with significant implications for exporters across South Asia. The U.S.–Bangladesh Agreement on Reciprocal Trade, signed on February 9, marks a notable shift in Washington’s approach to textile imports by committing to establishing a mechanism that will allow certain Bangladeshi textile and apparel goods to receive a zero reciprocal tariff rate. While details on volume thresholds and product categories remain to be finalised, the White House has clarified that eligibility will be tied to the use of U.S.-produced cotton and man-made fibre (MMF) textile inputs. This conditional market access signals a strategic attempt by the United States to secure demand for its raw materials while deepening supply-chain partnerships with trusted manufacturing hubs. For Bangladesh, whose export economy is heavily dependent on ready-made garments, the agreement represents an unprecedented opportunity to consolidate its position in the world’s largest consumer market.
The promise of zero-tariff access to the U.S. market, even within defined quotas, could significantly enhance Bangladesh’s competitiveness against other apparel-exporting nations. By linking tariff concessions to the use of American cotton and MMF inputs, Washington is effectively creating a vertically integrated trade loop that benefits U.S. farmers and fibre producers while enabling Bangladeshi manufacturers to lower landed costs in the American retail market. However, this access is not unconditional. Compliance requirements are expected to include traceability of raw materials, adherence to labour and environmental standards, and transparent supply-chain reporting—areas in which Bangladesh has made progress since the Rana Plaza tragedy but continues to face scrutiny. The conditional framework suggests that the United States is not merely opening its market but reshaping sourcing norms to favour partners who align with its economic and regulatory priorities. This model could serve as a template for future textile trade arrangements, particularly in an era characterised by friend-shoring and supply-chain resilience.
For India, the development initially triggered concern within an industry that is the country’s largest employment generator after agriculture and a critical source of export revenue. Indian textile exporters feared that preferential access for Bangladesh could erode their market share in the United States, especially in price-sensitive segments such as basic apparel and home textiles. Responding to these anxieties, Union Commerce and Industry Minister Piyush Goyal assured industry stakeholders that India would receive the same facility as Bangladesh, ensuring a level playing field. His assurance reflects both diplomatic engagement with Washington and recognition of the sector’s socio-economic importance. India’s textile ecosystem, spanning cotton cultivation, spinning, weaving, processing and garment manufacturing, supports millions of livelihoods and anchors numerous MSMEs. Securing comparable access to the U.S. market is therefore not merely a trade objective but a development imperative.
Yet parity in market access alone will not guarantee competitiveness. India’s textile exporters must navigate structural challenges that include higher logistics costs, fragmented supply chains, compliance burdens and slower adoption of MMF-based manufacturing compared to global competitors. The U.S. condition linking tariff benefits to the use of American cotton and MMF inputs could, paradoxically, align with India’s own push to diversify beyond cotton-centric production and expand its MMF segment, which dominates global apparel trade. If leveraged strategically, this requirement could encourage Indian manufacturers to integrate U.S. fibres into their supply chains while upgrading technology, improving scale efficiencies and meeting stringent sustainability benchmarks. The opportunity lies not only in tariff relief but in repositioning India as a reliable, compliant and innovation-driven sourcing destination in a rapidly reconfigured global market.
Ultimately, the U.S.–Bangladesh agreement and the assurances extended to India underscore a broader transformation in textile trade, where market access is increasingly contingent upon strategic alignment, supply-chain transparency and standards compliance rather than solely on cost competitiveness. For Bangladesh, the agreement offers a pathway to deepen its export footprint while reinforcing reforms in labour and environmental governance. For India, the promise of similar access presents both relief and a call to accelerate structural reforms, enhance MMF capacity and strengthen global value-chain integration. For the United States, the arrangement secures demand for domestic fibres while diversifying sourcing away from geopolitical rivals. As these three nations recalibrate their textile relationships, garment exporters across the region must prepare for a future in which preferential access is earned through compliance, collaboration and strategic adaptability rather than granted by default.