India-US trade deal: Welcome news is emerging from the US for the Indian textile industry and exporters. There had long been concerns that special concessions being granted to Bangladeshi textile traders in the US market could lead to a decline in Indian trade. However, the Commerce Ministry has indicated that India, like Bangladesh, will also benefit from zero duty.
What is this new “zero-duty” deal with the US?
According to the Commerce Ministry, ongoing negotiations between India and the US have determined that Indian exporters will receive the same benefits as those in Bangladesh. This means that if Indian textile manufacturers purchase cotton from the US, produce textiles from it, and export them back to the US, they will not be subject to any import duty.
This arrangement is being viewed as a “reciprocal tariff,” meaning reciprocal tariff benefits. The government believes this move will make Indian textiles more competitive in the US market. Until now, Indian exporters have been concerned that if Bangladesh receives significant tariff exemptions and India does not, their orders might decline. But the proposed agreement has largely allayed this fear.
Piyush Goyal and Rahul Gandhi Face Off
The political temperature in Parliament has also risen over this trade agreement. Rahul Gandhi, the Leader of the Opposition in the Lok Sabha, alleged that Bangladesh received better terms than India under the US trade agreement. Union Commerce Minister Piyush Goyal sharply responded to this claim and presented the government’s position in Parliament.
Piyush Goyal clarified that the opposition’s misconception is completely false. He said, “A lie was spread in Parliament that Bangladesh benefited more than India. The truth is that just as Bangladesh enjoys zero tariff benefits on using American raw materials, India will also receive the same benefits.” Goyal also stated that the framework of this agreement is currently being finalised, and once the interim agreement is finalised, all terms will be disclosed in the fine print.
90 to 95 Percent of agricultural products are excluded from the Agreement
The backdrop of this entire development is a joint statement issued by the United States and Bangladesh on February 9, 2026. In that statement, the United States announced it would reduce tariffs on Bangladeshi goods to 19% and grant zero-duty access for clothing made from American cotton. This announcement confused the Indian market, and the government has now clarified it.
In addition, Piyush Goyal also reassured the country’s farmers. Often, free trade agreements raise the fear that foreign agricultural products will flood the Indian market, harming local farmers. Goyal stated that approximately 90-95 per cent of agricultural products produced in India are excluded from this agreement, meaning American agricultural products will not flood the Indian market.
