US-India Trade Deal Vs US-Bangladesh Pact: Who Gains The Upper Hand?

India’s trade surplus with the US may cross $90 billion annually after the trade deal, with at least a $45 billion annual additional trade surplus with the US, which is 1.1 per cent of the GDP, and savings of $3 billion in forex reserve, an SBI Research report said on Thursday.

The trade deal with the US, back on the heels of wide arc of trade deals with the EU and the UK, catapults India to a unique strategic position wherein the country, as also its exporters, are poised to gain much, without ceding meaningful ground on matters of sensitivities, said the report.

“As per our preliminary estimates, Indian exporters may increase their exports of top 15 items to the US by $97 billion in a year. Including the remaining items the potential may easily cross $100 billion mark,” said Dr. Soumya Kanti Ghosh, Group Chief Economic Adviser, State Bank of India.

Also, the US has yearly potential of more than $50 billion imports in India (ex services).

India’s trade surplus with US was $40.9 billion in FY25, $26 billion in FY 26 (April-December) and it could cross $90 billion annually, said Ghosh.

Moreover, on the US-Bangladesh deal, the report said the US imports around $7.5 billion of textile imports from India and around the same quantity from Bangladesh; however, the share of different items imported from the two countries are different.

For instance, US imports more of apparel (not knitted) from Bangladesh while other made-up textiles account for higher amount imported from India.

The recent trade deal between US-Bangladesh has reduced the tariffs on Bangladesh goods to 19 per cent.

However, a certain clause that allows certain quantity of textile and apparel goods from Bangladesh imported at zero reciprocal tariff rate depending on the quantity of cotton and man-made fibre textile inputs imported from US has raised suspicion that it can harm Indian textile exporters as Bangladesh’s imports could become more competitive for the US.

“However, the cost of importing from the US would be much higher than importing from India, thus it may not dilute India’s competitive advantage,” said the report.

If the US cotton replaces 10 per cent of our cotton exports and 2 per cent of our man-made fibres exports to Bangladesh, then India would lose a minuscule $1 billion.

“Also, the latest deal with the EU has opened up $260 billion textile market with zero duty over textile imports from India,” the report noted.

(Disclaimer: This report has been published as part of the auto-generated syndicate wire feed. Apart from the headline, no editing has been done in the copy by ABP Live.)