India is expected to receive zero-tariff access for garments manufactured using American cotton under the final India–US trade agreement, Union Commerce Minister Piyush Goyal said on Thursday. The move is aimed at ensuring that Indian textile exporters enjoy tariff advantages comparable to those currently available to competitors such as Bangladesh, thereby strengthening India’s position in the US market and boosting its apparel exports.
Responding to concerns over differences between the initial joint statement and the subsequent fact sheet, Ministry of External Affairs spokesperson Randhir Jaiswal said the revised document reflects the agreed framework between both countries. “Both sides will now work towards implementing this framework and finalising the Interim Agreement,” he stated.
The clarification comes amid heightened interest from industry stakeholders, particularly in the textiles and apparel sector, over the scope and implications of the proposed trade arrangement.
Union Commerce and Industry Minister Piyush Goyal announced that India will receive concessional duty access for garments manufactured using American yarn and cotton under the interim trade agreement with the United States. The arrangement mirrors a facility extended to Bangladesh, under which garments produced using US-origin raw materials enjoy zero reciprocal tariffs.
“Just as Bangladesh enjoys a benefit where, if raw materials are purchased from the US, processed into fabric, and then exported, they are subject to zero reciprocal tariffs, India will also receive the same facility,” Goyal said. “Once our interim agreement is finalised, you will be able to see this clearly in the fine print.”
Currently, India’s reciprocal tariff stands at 18 per cent, compared to 19 per cent for Bangladesh. However, exporters had raised concerns that Dhaka’s additional exemption for garments made using American cotton and man-made fibre could provide it with a pricing advantage in the US market. The minister’s statement is expected to reassure Indian exporters that a level playing field will be maintained.
Emphasising that the agreement has been carefully calibrated, Goyal said sensitive sectors, especially agriculture, have been adequately safeguarded. “Around 90–95 per cent of products grown by Indian farmers are out of the US trade deal,” he noted. “What India needs and what we import even now, and items that will not hurt farmers in India in any way — only those items were opened in a calibrated manner after careful consideration that will ultimately benefit our farmers.”
He added that the arrangement would also create new export opportunities for Indian processed agricultural products, particularly in markets with which India has signed Free Trade Agreements, including the United States, the European Union, Switzerland and Norway.
The minister underscored that the interim pact strikes a balance between protecting sensitive domestic sectors and expanding export prospects, especially for labour-intensive industries such as textiles and apparel, which are critical for employment generation.
Earlier, trade research body Global Trade Research Initiative (GTRI) had observed that even in Bangladesh’s case, the benefit of concessional treatment may be limited, as the exemption applies only to the value of US-origin raw materials, which typically constitute a fraction of total garment export value.
With both sides now moving towards operation alising the agreed framework, industry stakeholders will closely watch the final contours of the interim agreement, particularly the detailed provisions governing rules of origin, tariff concessions and sector-specific safeguards.
Source: Times Of India
(Rewritten & adapted by Indian-Apparel.com News Desk)
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