India’s share in US garment market shrinks after US cuts Bangladesh tariffs

The United States has lowered its tariff on Bangladeshi garments from 35% to 20%, leading to a noticeable decline in India’s share of the US apparel market.

On July 8, US President Donald Trump sent a letter to Bangladesh’s Chief Adviser Dr Muhammad Yunus announcing the imposition of a 35% tariff on Bangladeshi products starting August 1. However, following subsequent negotiations, the tariff was reduced to 20%.

Meanwhile, the US has maintained a 25% tariff on Indian products, which took effect on Friday.

Bangladesh is a major exporter of ready-made garments to the US, leveraging advantages in technology and labor availability. India has long sought to expand its share in this market. Last month, when the US announced the 35% tariff on Bangladeshi goods, India’s market share briefly surpassed Bangladesh’s, with a surge in stock prices of major Indian garment manufacturers.

Since the tariff reduction announcement, shares of leading Indian apparel companies have dropped significantly: KPR Mills by 5%, Welspun Living by 2%, Alok Industries by 0.8%, Pearl Global by 3.7%, Gokaldas Exports by 2.6%, Kitex Garments by 3.21%, and Burdwan Textile by 2.8%.

In parallel developments, the US has signed a trade agreement with Pakistan, reducing tariffs on Pakistani products from 29% to 19%. Additionally, the two countries have entered into a joint oil exploration agreement.

The recent US tariff adjustments have reduced duties for more than 50 countries, including several in South Asia and ASEAN. India remains an exception, with the 25% tariff unchanged.