Last Updated on February 5, 2026 4:09 pm by BIZNAMA NEWS
Zakir Hossain from Dhaka
Bangladesh’s export sector is facing renewed pressure after the United States reduced tariffs on Indian goods to 18% under a bilateral trade deal, widening the cost gap with Bangladeshi products that continue to face an effective 20% tariff. The move follows India’s free trade agreement with the European Union signed on January 27.
Trade experts warn that the tariff disparity could hurt Bangladesh’s readymade garment exports to the US, particularly basic T-shirts, knitwear and casual apparel, where price competitiveness is crucial. Exporters say even a 1–2 percentage point tariff difference can influence buyers’ sourcing decisions.
Industry insiders report that export growth has slowed for three consecutive months, while competitor countries gain advantages through global trade agreements. With lower US duties, India can offer more competitive prices, better access to raw materials and faster delivery timelines, putting Bangladeshi orders at risk.
Garment factory owners say they now face a difficult choice: cut prices to retain buyers or risk losing business. Lower prices would further squeeze margins at a time when factories are already grappling with high production costs, gas and power shortages, and pressure from bank loans.
The Bangladesh Garment Manufacturers and Exporters Association (BGMEA) former director Mohiuddin Rubel said India signed nine major trade agreements between 2021 and 2026, strengthening its global export position, while Bangladesh has only one effective deal with Bhutan and another nearing completion with Japan. India’s progress, he said, reflects “long-term strategy, a complete textile and apparel ecosystem, strong infrastructure, skills development and higher value addition.” Rubel urged Bangladesh to adopt long-term planning, including targeted FTA or CEPA strategies, investment in logistics and port efficiency, policy stability and skilled human resources.
The Bangladesh Knitwear Manufacturers and Exporters Association (BKMEA) Executive President Fazle Ehsan Shamim warned that Bangladesh is facing a renewed competitiveness crisis. He said Bangladeshi exporters currently pay a combined 35% duty—15% customs duty and 20% reciprocal tariff, compared with India’s lower burden of 18%.
“Exporters are losing global competitiveness as buyers push for lower prices,” he said, urging stronger diplomatic efforts and policy support. Analysts also cautioned that the expected loss of GSP benefits in the European market after 2026 could deal a major blow to Bangladesh’s largest export destination unless urgent reforms and trade strategies are put in place.
