On Thursday, Commerce Minister Piyush Goyal announced that India will gain from a trade agreement with the United States, which includes discounted tariffs on textiles made from American cotton and yarn, similar to the benefits currently enjoyed by Bangladesh. The U.S. will reduce reciprocal tariffs on Bangladeshi goods to 19 percent. However, zero tariffs on Bangladeshi textiles apply only when they are produced using American cotton and synthetic fibers. Currently, Bangladeshi textiles face a 31 percent tariff (12 percent Most Favored Nation tariff and 19 percent reciprocal tariff), which drops to 12 percent if American fibers are utilized.

Goyal informed reporters that India will receive the same benefits as Bangladesh under the final agreement. He elaborated that just as Bangladesh can purchase raw materials from the U.S., process them into textiles, and export them at zero reciprocal tariffs, India will also have access to this facility. The framework for our structural agreement is currently being prepared, and the details will be available once the interim agreement is finalized.

He further clarified that if Indian companies buy cotton and yarn from the U.S. to manufacture textiles in India for export to the American market, those products will also enjoy tariff exemptions similar to Bangladeshi textiles. He stated, "This provision exists in the U.S.-Bangladesh agreement and will be part of ours as well." He assured that this would not adversely affect Indian cotton farmers.

The minister noted that cotton production in the U.S. is limited, with exports amounting to only about 5 million USD, while India aims for a target of 50 billion USD. India and the U.S. have finalized the framework for the first phase of their bilateral trade agreement, which is expected to be implemented in March. Goyal also took a jab at opposition leader Rahul Gandhi, accusing him of spreading misinformation.