The United States has reduced tariffs on Bangladeshi goods from 35 percent to 20 percent. Meanwhile, it has imposed a 25 percent tariff on Indian products, effective from today.
Following the announcement, India’s apparel market saw a sharp decline in share prices on Friday (August 1).
On July 8, U.S. President Donald Trump sent a letter to Chief Adviser Dr. Muhammad Yunus, informing him that starting August 1, Bangladeshi products would be subjected to a 35 percent tariff. However, after further discussions, the tariff was reduced to 20 percent.
Bangladesh exports a significant volume of ready-made garments (RMG) to the U.S. India has long been trying to gain a stronger foothold in this market, but Bangladesh holds an advantage due to affordable labor and production technologies. Last month, when the 35 percent tariff on Bangladeshi goods was initially announced, India’s position in the U.S. market strengthened, leading to a rise in share prices in its apparel sector. However, the latest tariff revision has shifted the scenario.
After the announcement of reduced tariffs on Bangladeshi goods, shares of Indian apparel companies fell: KPR Mills by 5%, Welspun Living by 2%, Alok Industries by 0.8%, Pearl Global by 3.7%, Gokaldas Exports by 2.6%, Kitex Garments by 3.21%, and Bardhaman Textiles by 2.8%.
Meanwhile, Pakistan has signed a trade agreement with the U.S., leading to a reduction in tariffs on Pakistani goods from 29 percent in April to 19 percent. Additionally, the U.S. has entered into a joint oil exploration agreement with Pakistan.
The latest U.S. tariff revisions show that duties have been lowered for goods from over 50 countries, including many in South Asia and the ASEAN region. The only notable exception is India, where the previously announced 25 percent tariff remains unchanged.