‘Don’t bemoan the loss of…’: Deepak Shenoy’s take on textile exports after US-Bangladesh deal

The US-Bangladesh trade deal that includes a component on textile exports has raised concerns in India. In the deal, Washington has “committed to establishing a mechanism for certain textile and apparel goods from Bangladesh using US-produced cotton and man-made fiber to receive zero reciprocal tariff in the US market”, said Muhammad Yunus, chief advisor heading Bangladesh's interim government.

“Don't bemoan the loss of the really low end textile exports. Our textile hubs will learn to sell local -where there is demand - or move to higher tech involved manufacturing. Most fears are unfounded... Life always finds a way,” said Capitalmind AMC CEO, Deepak Shenoy. 

The government had earlier – before the Bangladesh-US trade deal was announced – said that the India-US trade deal is set to open up America's $118 billion global imports market of textiles, apparels and made ups, a "major opportunity" for India's textile industry.

The US is a top market for Indian textile. At that time, India had supposedly gained a more favourable position than its competitors who were tariffed higher, including Bangladesh at 20 per cent, China at 30 per cent, Pakistan at 19 per cent and Vietnam at 20 per cent. 

The government had said last week that the trade deal would alter the market dynamics as large buyers would surely relook at their sourcing in the light of this agreement. 

Meanwhile, the Opposition has slammed the government for bringing US tariffs to 18 per cent, which were earlier 3 per cent before US President Donald Trump’s regime. "Textile goods from 3% tariff pre-Trump is higher than 18% tariff post the deal, as per the logic of India’s Commerce Minister. We were told to clap for this genius deal," Shiv Sena (UBT) leader Priyanka Chaturvedi said.

“Now the US has signed a trade deal with Bangladesh in which the US has committed to establishing a mechanism for textile and apparel goods using US cotton or man made fibre from Bangladesh at zero reciprocal tariff in the US market. India’s Commerce Minister will now tell us the benefit Indian textile exporters will get with 18% tariff over Bangladesh’s 0%,” she said.

Separately, according to the India Brand Equity Foundation, India exported $578.64 million of cotton yarn, $564.83 million of Indian cotton, not carded or combed, with a staple length of 28.5 mm (14/32") and above, but below 34.5 mm, and $416.49 million of cotton yarn, not for retail sale, containing 85 per cent or more cotton by weight in FY25.