ust two weeks ago, Indian traders were strategising to capture a greater share of the US market for readymade garments by leveraging the advantage of reciprocal tariffs.
They had assumed that Bangladesh, Cambodia, and Indonesia would face comparatively higher reciprocal tariff, while Indian products would be subject to lower rates.
However, the situation has completely reversed. On 31 July, while the US administration imposed reciprocal tariff of 19 per cent on goods from Cambodia and Indonesia and 20 per cent on Bangladeshi products, it slapped a 25 per cent duty on Indian goods.
As a “penalty” for purchasing crude oil from Russia, President Trump announced an additional 25 per cent duty on Indian products last Wednesday.
This will raise the total reciprocal duty on Indian goods entering the US market to 50 per cent. Although the reciprocal duty took effect yesterday, Thursday, the additional 25 per cent tariff on Indian goods will be implemented after 21 days.
As a result of the higher tariffs on Indian products, Bangladesh now has an opportunity to increase exports of certain goods.
Exporters say that once the higher tariffs take effect, Indian exporters will lose competitiveness in several categories, including ready-made garments, home textiles, processed agricultural foods, leather goods, frozen fish and shrimp, and furniture.
These are among Bangladesh’s top export items. Consequently, Bangladeshi exporters may receive US orders that shift away from India.
According to India’s Ministry of Commerce, the country exported goods worth USD 80.77 billion to the US market in 2024. This included USD 12.58 billion in electrical machinery and parts, USD 9.30 billion in jewellery, USD 8.87 billion in pharmaceuticals, USD 5.18 billion in ready-made garments, USD 3.70 billion in processed agricultural products, USD 1.97 billion in frozen fish and shrimp, USD 750 million in leather goods, and USD 1.15 billion in furniture.