The proposed Bangladesh–US trade understanding, which could allow near zero-tariff access for Bangladeshi garments to the American market subject to specific riders, has triggered debate within India’s textile and apparel industry. The real gains from zero tariffs may be limited due to high freight costs, longer lead times, and insufficient capacity in Bangladesh’s spinning and weaving/knitting sectors.

Bangladesh is already among the top suppliers of apparel to the US, particularly in basic knit and woven categories such as T-shirts, trousers and sweaters. A tariff advantage, even if modest, could sharpen its price competitiveness in high-volume, price-sensitive segments dominated by mass retailers.

The proposed Bangladesh–US trade understanding offering near zero-tariff access for garments has sparked debate in India’s textile sector.
While Bangladesh may gain a price edge in basic apparel, industry leaders believe the effective advantage could be limited to 2–3 per cent due to raw material dependence, capacity constraints and logistics costs.

However, Indian industry leaders argue that the net gain for Bangladesh may be restricted to around 2–3 per cent in effective competitiveness. They point to structural constraints, including Bangladesh’s heavy reliance on imported raw materials. A significant share of its fabric and yarn requirements is sourced from China and India, limiting flexibility in rules-of-origin compliance if strict value-addition conditions are attached to the deal.

Capacity limitations in spinning, weaving and man-made fibre processing are also seen as bottlenecks. While Bangladesh has built scale in garmenting, its upstream integration remains narrower than India’s diversified fibre-to-fashion base. Indian exporters emphasise that integrated supply chains offer advantages in speed, customisation and smaller batch production.

Logistics and lead times may further temper expectations. Distance from major US ports, coupled with infrastructure pressures and global shipping volatility, could offset part of the tariff benefit. In contrast, Indian suppliers have been investing in port connectivity, digital compliance systems and flexible production models to strengthen reliability.

Industry representatives also highlight that US buyers are increasingly factoring in sustainability, traceability and geopolitical risk. India’s growing adoption of renewable energy in textile clusters, compliance with global standards and broader product depth may help it retain strategic sourcing partnerships.

While some diversion of orders in basic categories cannot be ruled out, exporters believe the overall impact will be incremental rather than disruptive. The consensus view is that tariff preference alone is unlikely to override considerations of scale, compliance, diversification and long-term supply-chain resilience.

Fibre2Fashion News Desk (KUL)

United States (US) Senator Bill Cassidy, along with Senator Sheldon Whitehouse, have introduced the ‘Last Sale Valuation Act,’ legislation aimed at closing a long-standing customs loophole that allows importers to underpay duties by declaring goods at artificially low values. The act would require tariffs to be assessed on the final sale value of imported goods rather than earlier transactions in complex overseas supply chains.

“This bill protects Louisiana workers and American businesses, ensuring loopholes don’t hold them back,” Dr Cassidy said in a press release.

US Senators Bill Cassidy and Sheldon Whitehouse have introduced the Last Sale Valuation Act to close the ‘first sale’ customs loophole that lets importers underpay duties.
The bipartisan bill would base tariffs on final sale values, strengthen US Customs enforcement and curb duty evasion.
Supporters say it will protect American manufacturers, workers and federal revenue.

If passed, the bipartisan measure would grant clearer enforcement authority to US Customs and Border Protection (CBP), streamline valuation reviews and reduce disputes over documentation, while curbing mis-invoicing and related-party pricing schemes linked to tariff evasion and illicit financial activity.

The legislation has drawn support from the American Compass, the Coalition for a Prosperous America and the Southern Shrimp Alliance.

“Cassidy’s ‘Last Sale Valuation Act’ strengthens customs valuation by assessing duties on the final transaction value of goods entering the US,” said Mark A DiPlacido, senior political economist at the American Compass, adding that closing the judicially created ‘first sale’ loophole would reduce duty evasion, simplify enforcement and increase customs revenue.

Jon Toomey, president of the Coalition for a Prosperous America, said the bill is “an important first step in restoring customs integrity,” ensuring duties are paid on the true commercial value of imported goods and helping level the playing field for American manufacturers and workers.

Fibre2Fashion News Desk (CG)