Trump betrays Modi days after trade deal; US gives zero tariff to Bangladesh on textile, India at 18% | India News

India and the US have reached a deal that gives Opposition parties new ammunition against the Modi government. Ministers and BJP leaders welcomed the agreement under which the US reduced tariffs to 18%. However, the pre-liberation day duty on India is around 2.6 per cent and hence should be seen as an 18 per cent duty increase since Donald Trump comes to power in 2025. Now it seems that the US expected India to accept the deal, and after the agreement was signed, Washington betrayed New Delhi by offering Bangladesh a better deal.

US-Bangladesh Trade Agreement

Sharing the details of the agreement with the USA, Bangladesh’s interim government head Muhammad Yunus said that the Mutual Tariff agreement between Bangladesh and the USA was signed on Monday after nine months of negotiations since April last year.

The US will further reduce the reciprocal tariff, which was initially set at 37% and later reduced to 20% in August last year, to 19%. In addition, the United States has committed to establishing a mechanism for certain textile and apparel products from Bangladesh that use U.S.-produced cotton and man-made fibers to achieve zero reciprocal tariffs in the U.S. market.

Bangladesh’s chief negotiator, NSA Rahman, said, “Reducing reciprocal tariff will provide further advantages to our exporters, while zero reciprocal tariff on certain textile and apparel exports from Bangladesh using US inputs will give a significant boost to our garment industry.”

Trump Betrayed Modi

Notably, Bangladesh’s textile exports to America charge 0% customs duty for the use of US cotton/man-made fibers, while India charges 18%. It is also worth noting that India imports US cotton worth $200 million, while Bangladesh imports $250 million. The $50 million difference costs India 18%.

The India-US trade deal has swung heavily in America’s favour, with New Delhi pledging to make $500 billion in purchases over the next five years. While India has reduced customs duties to zero on most products imported from the US, America continues to impose 18% tariffs on Indian goods. The good thing about New Delhi was that it had one percent lower customs duty than Bangladesh in the textile sector, where India, Bangladesh and Pakistan compete. Although the US tariff on Indian textiles is slightly lower at 18% compared to 19% in Bangladesh, the new agreement provides duty-free access to Bangladesh. This not only neutralizes India’s previous tariff advantage, but also puts Indian textile exports at a cost disadvantage compared to Bangladesh.

It is now clear that the US first waited for India to sign the agreement and then betrayed New Delhi by offering a better deal to Bangladesh, which had little to offer America compared to New Delhi. It is now clear that India has succumbed to US pressure and the Modi government has accepted a deal that will greatly benefit America while questioning India’s sovereignty. Trump easily betrayed his ‘good friend’ Modi and New Delhi is likely to endure this defeat as well.