Bangladesh and the United States have signed a landmark trade agreement granting duty-free access for garments made in Bangladesh using US-imported cotton and synthetic fibers. Under the deal, both countries will reduce mutual tariff rates to 19 percent, and apparel produced with US raw materials will face no counter-tariffs when exported to the American market. The agreement is expected to reshape Bangladesh’s export strategy by allowing direct sourcing of cotton from the US and exporting finished goods back to the same market with tariff exemptions.

Trade analysts note that Bangladesh’s textile industry has long depended on Indian cotton, but frequent policy shifts, export bans, and price instability in India have created supply risks. According to the National Board of Revenue, India’s share in Bangladesh’s cotton imports fell from 31.39 percent in 2021 to 15.9 percent in 2025, while Brazil and the US have strengthened their positions. Textile mill owners believe the new deal will ensure more reliable supply chains and reduce dependence on India.

Industry data show that US cotton imports reached 346 million dollars in 2024–25, up from 278 million the previous year, and this share is expected to grow further under the new arrangement.