In early 2026, significant trade deals occurred between the United States and two important Asian trading partners, India and Bangladesh. Both agreements aim to reduce tariff barriers and expand market access, creating export opportunities for each country’s major industries. While the specific terms differ, export sectors in India and Bangladesh stand to gain from tariff cuts and improved market access in the highly lucrative US market. These developments also have broader implications for global supply chains, investment flows and competitiveness in strategic sectors.
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What India and the United States Agreed
India and the United States reached a framework trade deal that lowers US tariffs on many Indian exports from previously punitive levels to about 18% on most products. This marks a dramatic reduction, especially since earlier punitive tariff levels had reached around 15% on targeted Indian goods. As part of the agreement, India also provides greater access to US industrial and agricultural products, subject to sensitive protections. The overall direction is to restore competitiveness to Indian exports and recapture market share in the US.
What Bangladesh and the United States Agreed
Bangladesh also secured a trade agreement with the United States, under which tariffs on most Bangladeshi exports to the US are set at a reduced flat rate of 19%. Certain apparel and textile products made using US cotton and man-made fibres are eligible for zero tariffs, giving Bangladesh’s garment industry a distinct competitive edge in the US market.
These deals demonstrate how trade agreements can reshape export competitiveness. Below, we detail the sectors likely to benefit most in India and Bangladesh.
Key Indian Export Sectors Set to Benefit
Textiles and Apparel
The textile and apparel sector is widely regarded as one of the biggest beneficiaries of the India-US trade deal. About 30% of India’s textile exports go to the United States, making tariff reduction critical for regaining pricing competitiveness against regional rivals such as Bangladesh and Vietnam. With US duties lowered from the previously punitive levels, Indian textile and apparel manufacturers will be able to offer more competitive pricing, win larger orders from US buyers and improve capacity utilisation. Sectors such as home textiles, garments and made-ups all stand to benefit.
Gems and Jewellery
India’s gems and jewellery industry is another significant exporter to the United States and is expected to benefit from the deal. The reduced tariff burden lowers landed costs in the US market, easing margin pressures on diamond and gold jewellery exporters. This helps Indian firms maintain and expand their share of the US market and strengthens their global positioning.
Engineering Goods and Auto Components
Engineering goods that include auto components, industrial machinery and capital equipment account for a large share of India’s merchandise exports to the United States. Tariff relief on these products makes Indian engineering exports more competitive relative to East Asian suppliers. Auto ancillaries and related manufacturing sectors could see improved order inflows and stronger contract visibility with global OEMs.
Chemicals and Speciality Products
India has a strong presence in chemical exports to the United States. Lower tariffs enhance net realisations for speciality chemicals and intermediates, strengthening India’s role in US supply chains, particularly amid diversification strategies away from China. Agrochemicals and industrial chemicals exporters are likely to benefit from improved earnings and pricing power.
Marine Products and Seafood
The seafood and marine products segment, including shrimp exports, also stands to benefit. The United States accounts for a large portion of India’s seafood export volumes. Reductions in duties improve price competitiveness and could support higher export shipments and stronger demand from US buyers.
Leather and Footwear
Labour-intensive sectors such as leather goods and footwear are particularly sensitive to tariff structures. The reduction in US tariffs brings Indian exports closer to competitiveness with Southeast Asian rivals. This could trigger a revival in orders and improved utilisation of export capacities in these segments.
Home Decor Handicrafts and Artisan Products
Categories such as home decor, carpets, and handicrafts also benefit from lower duties. Many of these products are value-added and find niche markets in the United States. Tariff relief can expand market access and contribute to employment and rural incomes in craft clusters.
Pharmaceuticals and Technology Items
While many pharmaceutical exports already enjoy preferential or duty-free access to the United States, the improved trade framework enhances regulatory certainty and may indirectly support sustained export flows for generic drugs and active pharmaceutical ingredients. Additionally, expanded cooperation on technology products could support exports of certain electronics and IT hardware goods.
Key Bangladeshi Export Sectors Set to Benefit
Ready-Made Garments and Textiles
Bangladesh’s trade agreement with the United States offers a reduced overall tariff of 19% for most export goods and zero tariffs on apparel and textiles made with US materials. This provision is particularly important because the ready-made garment sector accounts for more than 80% of Bangladesh’s export earnings and employs millions of workers. Zero tariffs for certain products significantly strengthen the country’s competitiveness in the US apparel market.
Bangladesh’s garment and textile industry has historically been highly export-dependent, and tariff concessions are likely to improve pricing power against other suppliers and attract larger orders from US buyers looking for competitively priced products.
Broader Market Access
In addition to textiles, Bangladesh has agreed to provide preferential market access for certain US industrial and agricultural goods, including machinery, chemicals and medical devices. Over time, this could support the diversification of Bangladesh’s export base and attract greater manufacturing investment.
What This Means for Investors and Exporters
For Indian exporters, the trade deal’s tariff reductions restore competitiveness in sectors that were previously burdened by high duties to the United States. Textile and apparel firms can expect improved order visibility and pricing advantages. Engineering goods exporters, chemicals producers and marine product companies may see stronger demand and better margins. Gems and jewellery exporters stand to benefit from lower costs in landing goods in the US.
For Bangladesh exporters, the key benefit lies in tariff relief for apparel and textile goods, which dominate the export economy. Zero tariffs on select products and overall reduced rates improve export economics and may induce growth in shipments and employment.
However, both countries face competitive pressures and must ensure quality scale and supply chain resilience to maximize the benefits. Investors should monitor demand trends, order books and policy implementation timelines to evaluate medium-term export performance.
Conclusion
The India-United States and Bangladesh-United States trade deals represent significant steps in expanding market access and reducing tariff barriers. For India, sectors such as textiles, gems and jewellery, engineering goods, chemicals, seafood, leather and home decor are poised to benefit from improved access to the US market. Bangladesh’s apparel and textiles industry emerges as a major beneficiary due to tariff exemptions for products using US materials. These developments have the potential to create stronger export flows, employment growth and enhanced competitiveness for export-oriented industries in both countries.