US trade pact with Bangladesh, Vietnam, Cambodia to hit India’s cotton textile exports in Asia

Bangladesh, Vietnam, and Cambodia are looking to reduce or eliminate tariffs on US imports, a shift that could hurt India’s textile and cotton trade. These countries, which currently face high reciprocal tariffs Vietnam 46 per cent, Bangladesh 37 per cent, and Cambodia 49 per cent have received temporary relief with a 10 per cent base tariff for 90 days. In return, they are offering greater market access to US products, especially cotton and agricultural goods.

Bangladesh, a top importer of Indian cotton and yarn, has pledged to raise US cotton imports, while Cambodia will cut duties on 19 American products, slashing maximum tariffs from 35 per cent to just 5 per cent. Vietnam is also expected to follow suit.

With the US being the world’s third-largest cotton producer, cheaper US cotton could replace Indian supplies in these markets, as Indian cotton remains costlier.

India exports over $2 billion worth of cotton and yarn to Bangladesh alone, and similar volumes to Vietnam and Cambodia. Without reciprocal trade benefits, Indian apparel exports to the US valued at $10.5 billion in 2024 could also lose competitiveness. Industry experts urge the Indian government to negotiate a fairer trade deal with the US to safeguard export interests.