Days after the US administration announced the conclusion of the negotiations of the India-US trade agreement, Bangladesh has also secured a trade deal with the US. With the deal being finalised, the US have agreed to bring the tariff on the Bangladeshi export from 20% to 19%. While the tariff for India has been brought down to 18% after the negotiations were concluded, the uncertainty still remains as to the extent will Indian exporters be able to retain the competitive advantage over its neighbouring country.
One of the biggest beneficiaries of the India US deal is supposed to be the textile and apparel sector, who were the worst hit due to 50% US tariff since August. Globally, one of the major competitor of the Indian textile exporters has been the textile exporters of Bangladesh. The US Bangladesh trade deal has granted exemptions for some Bangladeshi textiles and garments manufactured with US material. While India has given reduced duty on the import of cotton(one of the major elements for textile manufacturers) from the US, no special provision has been given to India for textile exports so far.
However, unlike India, Bangladesh hasn’t opted for a protectionist measure to safeguard its agricultural sector. India has taken a phased approach of duty elimination with few agri items completely shielded. On the contrary, Bangladesh has opened its agri sector by setting a target of imports of approximately $3.5 billion of US agricultural products, including wheat, soya, cotton, and corn.
India has tried to maintain its data sovereignty by not including the provision of data sharing with US as a part of the agreement. However, Bangladesh has committed to the US to permit the free transfer of data across trusted borders; support the adoption of a permanent moratorium on customs duties on electronic transmissions at the World Trade Organization.
Finally, in India one of the biggest point of resistance in the domestic market is the purchase of energy from the US and lowering or stopping of the Russian crude oil. Trump administration has asked India to directly or indirectly stop purchase of Russian oil and warned that US will be monitoring India’s energy purchase. However, India and US haven’t yet set any target for the energy purchase. But Bangladesh has set a target of purchases of energy products from the US, with an estimated value of $15 billion over 15 years.