Why is it in the news?
Bangladesh and the US signed the “Cotton for Zero-Tariff” reciprocal trade deal.
Raises concerns for Indian textile exporters and cotton farmers.
Category: International Relations
Important Points:
● Bangladesh to get 19% reciprocal tariff (earlier 20%)
● Quota-based zero-duty entry for specified textile exports to US
● Zero-tariff conditional on use of US-produced cotton and MMF inputs
● Bangladesh to purchase USD 3.5 bn agricultural goods and USD 15 bn energy over 15 years
● India earlier had 18% tariff vs Bangladesh’s 20%
● For zero-duty quota, India faces 18% disadvantage
● Bangladesh is 2nd-largest apparel exporter; India ranks 6th
● Bangladesh accounts for ~70% of India’s cotton exports
● India exported USD 1.6 bn cotton yarn and USD 85 mn MMF yarn to Bangladesh (2024)
● Global textile trade: 70% MMF, 30% cotton; India largely cotton-based