Zero reciprocal tariff available to Indian textile exports too: Piyush Goyal clarifies on US trade deal after Bangladesh agreement

India-US trade deal: Commerce Minister Piyush Goyal on Thursday said that Indian apparel exports to the US will enjoy zero tariff access, if the raw material is procured from America. Goyal’s comments assume significance after the recently announced US-Bangladesh trade deal with a clause of zero tariffs for textile exports had raised concerns amongst Indian exporters.

As part of the arrangement, the US has lowered tariffs on Bangladeshi products to 19%, slightly above the 18% duty applied to Indian goods during the Donald Trump administration.


However, a provision included in the joint statement is expected to significantly support Bangladesh’s textile shipments to the US, raising concerns that it could potentially reduce the competitive edge that India had anticipated gaining in the market.

The joint statement reads: "The United States commits to establish a mechanism that will allow for certain textile and apparel goods from Bangladesh to receive a zero reciprocal tariff rate. This mechanism will provide that a to-be-specified volume of apparel and textile imports from Bangladesh can enter the United States at this reduced tariff rate, but this volume shall be determined in relation to the quantity of exports of textiles, e.g. US produced cotton and man-made fiber textile inputs, from the United States."

Zero Tariff Clause For Indian Textile Exports Too

Piyush Goyal has now clarified that Indian exports would also get the same benefit. “"... He (Rahul Gandhi) spread another lie in the Parliament that Bangladesh has got more benefits from the trade than India. Just as Bangladesh has a facility that if raw material is purchased from America, then if you process it and make cloth and export it, then it will be available at zero reciprocal tariff. India also has the same facility and India will also get it. Right now, our framework agreement is being made. When the interim agreement is finalised, then you will get to see this in the fine print,” Goyal said according to ANI.

Goyal also stressed that the India-US trade deal, which reduces tariffs on Indian exports to 18%, does not touch sensitive agriculture and dairy sectors. On Saturday, India and the US had released a joint statement on the trade agreement.

“ I want to clarify that India's interests and the interests of Indian farmers have been fully protected in the US-India trade deal. Most of the products of Indian farmers, our dairy, poultry, rice, wheat, soybean, and maize, banana, strawberry, cherry, orange, vegetables, ethanol, tobacco, meat, pulses, millets, bajra, ragi- almost 90-95% of the produce of farmers is outside the US trade deal,” Goyal said.

“...which is the need of India, which we import even today, which will not cause any harm to the farmers in our country - we have opened such commodities to America in a calibrated manner as per a well-thought-out strategy. In a way, a very good US trade deal is made in the interests of farmers,” he said.