India Faces Setback from US-Bangladesh Cotton Trade Deal

27-May-2026 05:51 PM

Mumbai. The trade agreement recently concluded between the United States and Bangladesh regarding the import and export of cotton and cotton products has the potential to reshape the landscape of regional trade and could prove detrimental to India.

Firstly, Bangladesh—traditionally the foremost buyer of Indian cotton—will now seek to procure increasingly larger quantities of cotton from the United States. Secondly, Bangladeshi textile products will gain duty-free access to US markets.

Currently, Bangladesh exports textile products worth $9–10 billion annually to the United States, accounting for an 8–9 percent share of the US market. In the medium term, this market share is expected to rise to 12–15 percent, potentially providing Bangladesh with an opportunity to generate approximately $5 billion in additional revenue.

This development will heighten the challenges and difficulties facing India within the US textile and apparel market. While the United States also serves as a massive market for Indian textile products, they are currently subject to an 18 percent import duty. Furthermore, India's exports of cotton to Bangladesh are also likely to decline.