India Seeks Zero-Duty Garment Access to US

India plans to secure zero-duty access for a portion of its textile and garment exports to the United States under a bilateral trade agreement expected to be finalised in March, drawing on a model similar to the recent Bangladesh-US arrangement.

Indian Commerce and Industry Minister Piyush Goyal said the proposed deal would allow a yet-to-be-determined quantity of Indian textiles and apparel to enter the US market at zero reciprocal duty, provided certain conditions are met.

Referring to the Bangladesh-US accord, Goyal said India would receive comparable benefits under its own agreement with Washington.

His remarks followed concerns among Indian garment manufacturers that their products could face an 18% competitive disadvantage after Bangladesh secured concessional access to the US market tied to the use of American yarn and cotton inputs.

Under the Bangladesh arrangement, the volume of duty-free textile and apparel exports is linked to Dhaka’s imports of US-produced cotton and man-made fibre textile inputs.

Bangladesh is currently the second-largest exporter of textiles and apparel to the US after China.

Officials indicated that India’s larger spinning capacity could enable it to utilise greater volumes of US cotton, potentially qualifying for a larger zero-duty quota than Bangladesh.

India’s spinning industry ranks among the world’s largest, and Bangladesh remains a major importer of Indian yarn.

Shares of leading Indian textile exporters, including Gokuldas Exports, KPR Mills and Arvind Ltd, which had fallen by as much as 7% earlier in the week after the Bangladesh-US announcement, recovered and closed up to 4% higher following Goyal’s comments.