Union Commerce Minister Piyush Goyal on February 14, 2026 assured that India will ensure zero-duty access to the US market for garments made from cotton or yarn imported from the US, similar to the benefits given to Bangladesh. Speaking to ET NOW, he touched on concerns that the Indian textile sector may suffer losses following the US-Bangladesh trade agreement signed on February 9. The agreement reduced reciprocal tariffs from 20% to 19% and imposed zero tariffs on certain textiles and clothing using US cotton and man-made fibers.
Goyal explained the “yarn-forward” principle: Fabrics processed from US cotton/yarn qualify for zero reciprocal tariff when exported to the US. He said this arrangement – which is expected to be contained in the fine print of the India-US Interim Trade Framework – will not adversely impact Indian cotton farmers, as rising global demand for the textile will sustain or expand domestic production.
Following the phone call between Prime Minister Narendra Modi and President Donald Trump on February 2, India and the US finalized an interim trade framework for early February 2026. US reduced tariff on Indian goods from 50% (imposed in August 2025) to 18%. Detailed provisions to remove non-tariff barriers are expected by March 2026 and aim to double bilateral trade from ~$191 billion to $500 billion by 2030.
The US imports about $7.5 billion worth of textiles from India every year, which is equivalent to that of Bangladesh. Goyal stressed India’s FTA with the EU and access to 38 markets, and appealed to focus on increasing productivity. Although the deal opens up opportunities in labour-intensive sectors, critics (including opposition leaders) have raised concerns about its potential impact on domestic farming and textiles. This interim agreement is being seen as a step towards a larger bilateral trade agreement.
Comments are closed.