Textile Stocks: Bangladesh has signed a trade deal with America before the general elections to be held on February 12. Under this deal, the American tariff on Bangladesh has been reduced to 19 percent from the earlier 20 percent. According to this agreement between the two countries, America will give exemption on textile and apparel products of Bangladesh.

The deal also mentions that imports of Bangladeshi textiles and readymade garments made from American cotton and man-made fibers can be kept out of the scope of tariffs. It is obvious that this will boost Bangladesh’s textile exports to America. America is already a big market for Bangladesh’s textile industry.

Big fall in shares

Many textile stocks like KPR Mills, Vardhaman, Welspun Living and Trident crashed during stock market trading on Galwar. A decline of 2.85 percent was seen in the shares of KPR Mill, 4.92 percent in the shares of Vardhman Textiles, about 2 percent in the shares of Welspun Living and about 3 percent in the shares of Trident.

What are investors afraid of?

Under the trade deal with America, tariff at the rate of 18 percent will be imposed on Indian textile exports. Whereas it has been said that Bangladesh will be given special relief with zero tariff. In such a situation, investors fear that they will have to face a tough challenge from Bangladesh’s textile products in the American markets because it is obvious that if Bangladesh exports Bangladeshi garments using cotton or fiber to America, then it will get the facility of zero tariff, whereas there is no such exemption on India’s textile exports. He will have to pay tariff at the rate of 18 percent. In such a situation, Bangladeshi products will become cheaper than Indian products in the American markets. This will increase the demand for Bangladeshi apparel instead of Indian apparel there.

Investors also fear that if Bangladesh gets the facility of zero tariff on the use of American cotton, then Bangladesh will buy cotton from America instead of India. This will cause loss to farmers and spinning mills involved in cotton cultivation in India. Let us tell you that Bangladesh is a big buyer of cotton from India.

Disclaimer: (The information provided here is being given for information only. It is important to mention here that investment in the market is subject to market risks. Always take expert advice before investing money as an investor. ABPLive.com never advises anyone to invest money here.)

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US-Bangladesh Trade Deal: Following India’s example, Bangladesh has also made a trade deal with America. Bangladesh and the United States on Monday finalized a mutual tariff agreement that reduces tariffs on Bangladeshi exports to the US market from 20 percent to 19 percent, according to a statement issued by the office of Muhammad Yunus, chief advisor to the interim government of Bangladesh.

In return, Bangladesh will reduce the tariff on goods coming from America to zero. This agreement between the two countries was signed by Commerce Advisor Sheikh Bashir Uddin and National Security Advisor Khalilur Rahman on behalf of Bangladesh. The United States was represented by US Trade Representative Jameson Greer.

Both benefit from trade deal

Under this agreement between the two countries, about 2500 products of Bangladesh will get help in reaching America at zero tariff or low tariff. These also include many things falling in the main export category of Bangladesh. Apart from these, clothes made using imported American cotton will also get entry in the American markets at zero tariff.

The items on which tariffs have been reduced or completely eliminated by the US include pharmaceuticals, fisheries, particle board and food items. Bangladesh in return has agreed to allow approximately 4,400 American products to reach Bangladesh at zero or low tariffs. The purpose of this trade deal is to help eliminate trade imbalances and expand opportunities for two-way commerce.

Under this trade deal, both countries have also agreed to impose zero reciprocal tariffs on some Bangladeshi textile and apparel exports made using American cotton and fiber. This will greatly benefit the textile sector of Bangladesh, for which America is a huge market.

How much tariff on Pakistan and China?

Like Bangladesh, if we talk about other Asian countries, America has imposed a tariff of 18 percent on India, 19 percent on Pakistan, 20 percent on Vietnam and Sri Lanka and the highest tariff of 30 percent on China.

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US Bangladesh Trade Deal: America has reduced the tax on goods coming from Bangladesh to 19 percent. This decision has been taken after the new trade agreement between the two countries. According to this agreement, if clothes are made in Bangladesh from raw materials made in America, then such clothes can be sent to America without any tax.

Interim Chief Advisor of Bangladesh Mohammad Yunus gave this information. He wrote on social media platform

Relief received after nine months of talks

This tariff reduction has happened after about nine months of negotiations between America and Bangladesh. Initially, in April, America had proposed to impose tax up to 37 percent on goods coming from Bangladesh. But after long negotiations, it was reduced to 20 percent in August last year. Now it has been further reduced to 19 percent. Yunus described this agreement as a big step towards saving jobs and strengthening Bangladesh’s place in the world textile market.

Who signed the agreement?

According to the government statement issued from Dhaka, the agreement was signed on behalf of Bangladesh by Commerce Advisor Sheikh Bashir Uddin and National Security Advisor Khalilur Rahman. On behalf of America, it was signed by US Trade Representative Ambassador Jameson Greer.

Greer praised Yunus and his team, saying they had done a good job in closing the deal. According to the statement, Greer said, “This agreement will further strengthen Bangladesh’s position in America’s trade policy.” The White House has also said that the two countries will also work together to remove non-tariff barriers existing in Bangladesh.

Big relief for textile industry

Bangladesh’s readymade garment industry is the backbone of its economy. More than 80 percent of the country’s total income comes from this sector. About 40 lakh people work in this industry, most of whom are women, who come from villages and poor families. This sector contributes about 10 percent to the country’s GDP.

People associated with the industry say that due to low tariff, Bangladeshi factories will be able to survive in the US market, which is one of the biggest markets for them. Many factories had come into trouble in the last few years. The reasons were increasing production costs, cost of electricity and fuel, fluctuations in currency prices and strict rules for foreign buyers. Earlier this month, US President Donald Trump had also signed a trade agreement with India, in which the tariff was reduced from 50 percent to 18 percent.

Agreement reached before elections

This trade agreement has taken place at a time when the environment in Bangladesh is very delicate. Elections are to be held in the country on Thursday. An interim government has been running there since August 2024, when former Prime Minister Sheikh Hasina left the country and went to India, where she is still. The situation has worsened before the elections. More than 40 people, including women, were injured in clashes between workers of different political parties on Wednesday night. The interim government wants to show before the elections that the country’s economy is stable and the government is trustworthy. Trade policy is being considered an important part in this.

US Bangladesh Secret Deal: After the recent trade deal between India and America, now another important movement is being seen in South Asia. India’s neighboring country Bangladesh has also taken steps towards a trade agreement with America. The special thing is that Bangladesh is going to seal an allegedly secret trade deal with America on February 9, and this development has come just three days before the parliamentary elections to be held there. The timing of this agreement, about a week after the India-US trade deal, has raised serious questions among the industry and policy experts of Bangladesh.

Why questions on trade deal?

The biggest concern regarding this proposed deal is its transparency and timing. According to Bangladeshi media reports, the terms of this agreement with America will not be made public and its draft will be kept completely confidential. Major daily newspapers of Bangladesh prothom alo According to him, making such a big and far-reaching agreement in the last phase of the government’s tenure is creating an uncomfortable situation. If this deal is signed on February 9, it will be a decision just before the end of the interim government and voting for the 13th parliamentary election.

The concern of the industry has also increased because after the recent trade deal between India and America, the 50 percent tariff imposed on India has been reduced to 18 percent. It is believed that the detailed details of the India-America agreement will be made public soon. Union Commerce Minister Piyush Goyal himself has indicated that the details of the bilateral trade agreement may be revealed in the next four to five days and an executive order may also be issued by the US to implement the 18 percent tariff. On the contrary, the apprehensions have deepened due to the Bangladesh-America deal being kept completely confidential.

Why is concern being raised?

Business organizations in Bangladesh fear that this agreement may have a negative impact on many key sectors, especially readymade garments and export-based industries. Enamul Haq Khan, senior vice president of Bangladesh Garment Manufacturers and Exporters Association (BGMEA), has raised questions on the timing of this deal, saying that such a big and long-term impact trade deal should have been done by the post-election government. He believes that taking such decisions by the temporary government can create problems for both the future government and the industry.

Overall, after the India-US trade deal, this step of Bangladesh is being considered important from the point of view of regional trade balance, but the way this agreement is being done just before the elections and without public information, it has increased the uneasiness within Bangladesh at both political and economic levels. In the coming days, it will be important to see what are the terms of this secret deal and how deep its impact is on the economy and industries of Bangladesh.

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Bangladesh Trade Deal: Bangladesh is also ready to follow India’s footsteps. After India, now Bangladesh is going to sign a trade agreement with America on 9 February. This deal will happen just 72 hours before the elections to be held on February 12. This deal is being done in a secret manner. The terms of the deal have also not been disclosed, due to which it is being criticized a lot.

Why is Bangladesh in such a hurry?

After the India-US trade agreement, Bangladesh is in a hurry to finalize this deal. Under the deal with India, the tariff on import of Indian goods in America has been reduced from 25 percent to 18 percent. Now Bangladesh fears losing market share to India in the American markets.

In fact, Bangladesh’s economy largely depends on readymade garment exports to America, which is about 90 percent of its total American exports. This deal of Bangladesh with America is being done after the imposition of 37 percent tariff in April last year, which was first reduced to 35 percent in July and then to 20 percent in August. It is expected that after this trade deal, the American tariff on Bangladesh will be further reduced to 15 percent.

Why is Bangladesh hiding the deal?

Additionally, the interim government led by Muhammad Yunus signed a formal non-disclosure agreement with the US in mid-2025, stipulating that all tariff and trade related negotiations be kept confidential. No draft of this agreement has been shared with either the public, the Parliament or the main stakeholders of the industry.

According to Prothom Alo, a local newspaper in Bangladesh’s capital Dhaka, in August last year, Commerce Advisor SK Bashir Uddin had said, “There will be nothing in the agreement that is against the interests of the country. It will also be made public after America’s consent.”

Crisis on Bangladesh’s economy!

Bangladesh exports textiles to America on a large scale every year, which is approximately equal to 7 to 8.4 billion dollars. This is about 96 percent of the goods sent from Bangladesh to America. In contrast, Bangladesh buys only about $2 billion worth of goods from America.

Overall, the garment sector in Bangladesh is the backbone of the country’s economy, providing livelihood to 4 to 5 million people and America is its biggest customer in this sector. If Bangladesh’s ‘secret’ deal does not match or better India’s 18 percent deal, American buyers may shift their orders to India, putting millions of Bangladeshi jobs at risk.

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