Local textiles hemmed in: Trump cuts bangladesh tariff to 20%, leaving India at a disadvantage

Kolkata | Pune: India is at a disadvantage to Bangladesh in the export of textiles and apparel to the US after President Donald Trump on Thursday reduced Bangladesh’s final tariff to 20% from 35%. The duty is 25% for imports from India.

Exporters are fearing a blow to their business since they also have to pay a penalty on top of the tariff. The US has yet to specify the extent of the penalty that Trump said would be imposed on India for its import of oil from Russia. Even the tariff on Cambodia, another country that competes with India for textile exports to the US, has been reduced to 19% from 36%. Other manufacturing hubs like Indonesia (19%) and Vietnam (20%) already face lower US tariffs.

The new tariffs will be effective August 7. India is the second largest exporter of apparel to the US, behind China. Indian exporters said they won’t be able to compete against Bangladesh unless they forsake most of their margins. “Our margins are in any case as low as 5-7%. With the new tariff in place, the survival of the industry will be at stake as it comprises micro, small and medium enterprise units mostly,” said Lalit Thukral, chairman of the Noida Apparel Export Cluster.


American brands and companies will not buy garments from India, as the tariff will make the price high, he said.

Between January and May 2025, the US bought textiles and apparel worth $4.59 billion from India, up 13.3% from a year earlier, according to the Office of Textiles and Apparel in the US. In the same period, Bangladesh’s exports grew nearly 21% to $3.62 billion and Cambodia’s shipments rose 18% to $1.94 billion.

Exporters from Tamil Nadu’s Tiruppur, the largest knitwear exporting hub of India, said US brands have deferred their purchase in the last two months due to uncertainty over tariffs. “Government should now sit down and work out incentives for the companies who are exporting to the US based on tariffs imposed on Bangladesh, Cambodia and Vietnam who are all India's competitors in the US market,” said Raja Shanmugan, MD of Warsaw International and past president of Tiruppur Exporters’ Association.