Union Commerce Minister Piyush Goyal clarified on Thursday that indian apparel exports to the US will enjoy zero tariff access if the raw materials are procured from the US. Goyal’s comments follow the recently announced US-Bangladesh trade deal, which includes a clause of zero tariffs for textile exports. This clause raised concerns among Indian exporters regarding the potential reduction of India’s anticipated competitive edge in the market, which elicited a response from the minister.
The US has lowered tariffs on Bangladeshi products to 19 percent, slightly above the 18 percent duty applied on Indian goods. However, this arrangement between the US and Bangladesh includes a provision that will allow for certain Bangladeshi textile and apparel goods to receive a zero reciprocal tariff rate when specified conditions are met.
The US-Bangladesh Joint statement read, “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.”
“India also has the same facility” - Piyush Goyal
“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.”
He further stressed sensitive agriculture and dairy sectors, saying, “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.”
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