The Indian Express reported on February 11 that the US-Bangladesh trade agreement could put pressure on India's textile industry. According to the agreement, the US will reduce the "reciprocal tariff" on Bangladesh from 20% to 19%, and implement zero tariffs on certain Bangladeshi textile and apparel products. The specific quota of duty-free products will be determined based on the scale of Bangladesh's imports of cotton and man-made fiber textile raw materials from the US. Bangladesh has pledged to provide "significant preferential market access" for US industrial products and agricultural products, and will purchase $3.5 billion (US$3.5 billion) in agricultural products and $15 billion (US$15 billion) in energy products from the US over the next 15 years. After the announcement of the agreement, the stock prices of several Indian textile export companies plummeted. Analysts pointed out that, given that both India and Bangladesh are major importers of textiles and clothing from the US, Bangladesh's significant market liberalization to gain competitive advantage for its core industries would pose a dual challenge to India. On one hand, the US's "reciprocal tariff" rate on India is 18%, and the difference between India and Bangladesh's tariffs has narrowed from 2% to 1%. Considering that the profit margin of the textile industry is already very thin, this may have a significant negative impact on India's textile industry. On the other hand, the US-Bangladesh reciprocal trade agreement requires Bangladesh to increase imports of US textile raw materials to obtain duty-free treatment, which could affect India's cotton yarn exports to Bangladesh. Analysts said that India originally expected to have a tariff advantage in textile exports to the US, but this might turn into a disadvantage. It is also known that India-Bangladesh relations remain relatively tense, and Bangladesh is also actively pushing forward the negotiation process of a free trade agreement with the EU.
Original article: toutiao.com/article/1856931121899532/
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