Bangladesh Moves Quickly Toward US Trade Pact Amid Fears of Losing Ground to India

Bangladesh is moving at an accelerated pace to finalise a trade agreement with the United States, driven by concerns that it could lose export competitiveness following India’s recent tariff concessions from Washington. The proposed deal, expected to be signed on February 9, has drawn attention not only because of its timing—just days before Bangladesh’s national elections—but also due to the limited public information surrounding its terms.

Officials familiar with the matter indicate that Dhaka’s urgency stems from the India–US trade arrangement announced earlier this week, under which tariffs on Indian goods entering the American market have been sharply reduced to 18%. For Bangladesh, whose economy is heavily dependent on exports to the US, particularly in the ready-made garments (RMG) sector, the development has raised alarms within government and industry circles.

Tariff Pressure and Competitive Concerns

The United States is Bangladesh’s single largest export destination, accounting for a significant share of its foreign exchange earnings. Garments and textiles alone make up the overwhelming majority of Bangladeshi exports to the American market. Any disadvantage in tariff rates compared to India could make Bangladeshi products less attractive to US buyers, potentially diverting orders to Indian manufacturers.

Over the past year, Bangladesh has already faced steep tariff pressures. In April 2025, Washington imposed tariffs of around 37% on Bangladeshi goods, which were gradually negotiated down over subsequent months. By August, the rate stood at about 20%. The new agreement is expected to bring this figure further down, possibly to around 15%, a level that would help Bangladesh remain competitive with regional peers.

However, the exact tariff structure and conditions of the upcoming agreement have not been officially disclosed, contributing to widespread speculation and debate.

Secrecy and Political Timing

One of the most contentious aspects of the proposed deal is the confidentiality surrounding its negotiations. In mid-2025, Bangladesh’s interim administration reportedly entered into a formal confidentiality arrangement with the United States, committing to keep details of tariff and trade talks restricted. As a result, no draft of the agreement has been shared publicly, nor has it been placed before Parliament or key industry stakeholders for consultation.

The timing of the signing—just three days before the national elections scheduled for February 12—has added to the controversy. Critics argue that committing the country to a major trade framework on the eve of an election limits public debate and leaves the incoming elected government with little room to renegotiate or revise its terms.

Trade analysts note that while interim administrations are empowered to conduct routine governance, agreements with long-term economic implications typically benefit from broader political consensus. “The concern is not only about what is in the agreement, but also about the process,” said a Dhaka-based trade policy expert. “Without transparency, it is difficult to assess both the risks and the benefits.”

Possible Conditions and Market Access

Reports circulating in Bangladeshi policy circles suggest that the agreement may include several conditions beyond tariff reductions. These could involve commitments to adjust import patterns, including reducing reliance on certain countries and expanding purchases from the United States in sectors such as defence equipment, transport, and technology.

There is also speculation that Bangladesh may be required to provide easier market access for US goods, including accepting American standards and certifications with limited additional scrutiny. While such measures could smooth bilateral trade, critics caution that they may have implications for domestic regulation and local industries.

Garment Sector on Edge

The garment industry, often described as the backbone of Bangladesh’s economy, is watching developments closely. The sector employs millions of workers and contributes the bulk of the country’s export earnings. Industry leaders say they have not been briefed on the details of the proposed agreement, leaving them uncertain about how it might affect production costs, sourcing, and long-term contracts with international buyers.

“If tariff parity with India is not achieved, buyers could easily shift orders,” said a senior representative of a garment exporters’ association. “Even a small difference can have a large impact in a highly competitive market.”

Economists warn that any disruption to garment exports could have ripple effects across the economy, affecting employment, household incomes, and overall growth.

Looking Ahead

For now, the Bangladeshi government maintains that the agreement will serve national interests and strengthen trade ties with the United States. Officials have indicated that details may be made public at a later stage, subject to mutual consent.

As the signing date approaches, the focus remains on whether the deal will deliver the tariff relief Bangladesh seeks, while balancing domestic economic priorities and democratic accountability. With regional competition intensifying and global trade conditions evolving, the outcome of the negotiations is likely to shape Bangladesh’s export trajectory for years to come.