India is exploring a trade arrangement with the U.S. that could allow zero-duty access for Indian textile exports, similar to the benefit currently available to Bangladesh, Commerce Minister Piyush Goyal told industry representatives on February 11 in New Delhi, as per news reports. A deal is expected to be signed by the end of March, industry sources said Business Standard.

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The discussions took place at Vanijya Bhawan, where Goyal informed exporters that the U.S. tariff framework does not limit zero-duty benefits to Bangladesh alone. Under initial tariff guidelines issued by the Trump administration, countries that use U.S.-origin raw materials amounting to at least 20% of the import value and convert them into finished products are eligible for zero-duty access to the U.S. market, as per news reports. 

Competitive Impact On Textile Exports

Bangladesh’s preferential access to the U.S. market has put Indian textile exporters under pressure in recent months. According to industry estimates shared during the meeting, Indian exporters had raised concerns about the potential loss of market share in garments and made-ups. The Commerce Ministry indicated that India is examining a similar arrangement to ensure parity with Bangladesh, sources said.

India’s textile and apparel exports to the U.S. stood at ₹3.6 trillion in FY25, according to data from the Ministry of Commerce and Industry. Bangladesh is one of India’s main competitors with respect to apparel exports to the U.S.A., with duty-free access and lower labour costs.

Cotton Trade With Bangladesh

Concerns were also raised about the potential impact on India’s cotton exports to Bangladesh. Bangladesh imports about 8.5 million bales of cotton annually to meet the requirements of its spinning mills, sourcing supplies from India, Brazil and African nations, according to industry data. India exports around 1.2 million bales of cotton to Bangladesh each year.

India produces about 37 million bales of cotton annually and imports nearly 5 million bales to bridge domestic demand-supply gaps, according to data from the Ministry of Textiles. Bangladesh continues to rely on imported yarn and fabric due to limited domestic cotton yarn capacity.

Market Implications For Textile Stocks

Shares of textile exporters were in focus following reports of the proposed U.S. arrangement. Market participants tracked stocks of spinning, weaving and garment manufacturing companies amid expectations of improved export competitiveness. The Ministry of Commerce has not issued a formal notification on the agreement timeline as of February 12.