Commerce Minister Piyush Goyal said India will also get zero export-duty access to the US market for garments made using cotton yarn imported from the United States, similar to the arrangement offered to Bangladesh. Speaking to ET NOW, the minister sought to address concerns that the Indian textile sector could face disadvantages after Bangladesh secured tariff concessions from the US.
Earlier this month, the US and Bangladesh signed an agreement on February 9, reducing reciprocal tariffs to 19 percent from the earlier 20 percent. The deal also provided zero-tariff access for select textile and apparel products made using US cotton and man-made fibre. Goyal clarified that the same “yarn-forward” principle applies to India, allowing exporters to ship garments to the US at zero duty if cotton or yarn is sourced from the US and processed into finished products.
The minister said the arrangement would not harm Indian cotton farmers, noting that global demand for cotton and textile products is expected to remain strong. He highlighted opportunities arising from free-trade agreements with the European Union and access to markets across 38 countries, adding that India must focus on increasing productivity to meet rising demand. According to SBI Research, the US imports about USD 7.5 billion worth of textiles from India annually, roughly similar to imports from Bangladesh.
India and the United States have also finalised the framework of an interim trade agreement, with detailed provisions expected by March. The two countries have agreed to address non-tariff barriers affecting bilateral trade. Following a February 2 phone call between Prime Minister Narendra Modi and US President Donald Trump, both sides announced progress in negotiations. The US tariff on Indian goods, which had been raised to 50 percent in August 2025, has now been reduced to 18 percent. The proposed Bilateral Trade Agreement (BTA), first discussed in February 2025, aims to more than double India-US trade from USD 191 billion to USD 500 billion by 2030.
