Bangladesh-style zero-duty textile access for India in US deal: Goyal, Pg1

Key Highlights:

• India and the US are expected to sign a trade deal next month that includes provisions for zero-duty textile exports to the US, similar to the Bangladesh-US deal.
• The Bangladesh-US deal allows duty-free export of a limited quantity of textiles and clothing to the US if raw materials are purchased from the US.
• Commerce Minister Piyush Goyal stated that India's deal with the US will have similar benefits for textile exports.
• Bangladesh is also seeking a Free Trade Agreement (FTA) with the European Union (EU) after India gained a competitive edge in the textile sector with trade agreements with the EU and the UK.

Detailed Insights:

• The zero reciprocal duty provision in the India-US trade deal could benefit Indian textile and garment exporters due to India's larger spinning capacity and higher utilization of US cotton.
• Bangladesh accepted conditions from the US, including purchasing approximately $3.5 billion of US agricultural products and allowing imports of US dairy products.
• Bangladesh also agreed to resolve or withdraw pending criminal cases against garment workers and labor leaders involved in union and protest activities.
• India accounted for around 5% of the EU’s textile and apparel imports in 2024, while China led with 28%, followed by Bangladesh (22%), and Turkey (11%).

Key Concepts Involved:

• Zero Reciprocal Duty: An agreement where no import duties or taxes are imposed on goods traded between countries.
• Free Trade Agreement (FTA): A pact between two or more countries to reduce trade barriers and promote economic cooperation.
• Least Developed Country (LDC): A country with low socioeconomic development indicators.