Bangladesh is moving quickly to finalise a trade agreement with the United States after India concluded a deal with Washington that lowered tariffs on Indian goods to 18 per cent. The development has triggered concern in Dhaka that Bangladesh could lose market share in the US if it fails to secure comparable or better terms.
The US and Bangladesh are expected to sign the agreement on February 9, just three days before the country’s national election scheduled for February 12. The timing and lack of transparency surrounding the deal have drawn criticism from economists, business leaders and political observers.
Bangladesh’s economy is heavily dependent on ready-made garment exports, which account for nearly 90 per cent of its exports to the US. Any tariff disadvantage compared to India could significantly impact export orders and employment in the sector.
Tariff cuts under negotiation
The proposed agreement follows a series of tariff revisions imposed by Washington. In April 2025, the US imposed a steep 37 per cent tariff on Bangladeshi goods. This was reduced to 35 per cent in July and further lowered to 20 per cent in August.
According to reports, the upcoming deal is expected to bring tariffs down further to around 15 per cent. Officials see this as critical to keeping Bangladeshi exports competitive against Indian products in the US market.
Secrecy around negotiations raises concerns
Concerns have intensified due to the confidential nature of the negotiations. In mid-2025, the interim government led by Muhammad Yunus signed a formal non-disclosure agreement with the US, committing to keep tariff and trade discussions confidential.
No draft of the agreement has been shared with the public, parliament or industry stakeholders. A commerce adviser had earlier stated that the deal would not go against national interests and could be made public with US consent.
Policy experts, however, argue that the lack of disclosure prevents meaningful debate on the agreement’s long-term implications.
Conditions reportedly linked to the deal
Media reports suggest that the agreement may include several conditions. These include reducing imports from China, increasing military procurement from the US, and allowing American goods easier access to the Bangladeshi market.
It is also reported that Bangladesh may be required to accept US standards and certifications without additional scrutiny. Inspections on US vehicle imports and parts could reportedly be eased to facilitate smoother entry into the local market.
A senior policy analyst described the process as opaque, noting that signing the agreement just days before elections could bind the hands of the next elected government.
Garment industry left in the dark
Bangladesh exports garments and textiles worth between $7 billion and $8.4 billion annually to the US, accounting for nearly 96 per cent of its total exports to the American market. In comparison, Bangladesh imports around $2 billion worth of goods from the US.
With India and Bangladesh exporting similar apparel products, lower tariffs for India could shift US buyers towards Indian suppliers. Industry leaders warn that this could put millions of jobs at risk in Bangladesh’s garment sector, which employs 4 to 5 million workers, most of them women.
The sector contributes over 80 per cent of Bangladesh’s export earnings and nearly 20 per cent of its GDP.
A senior garment exporters’ association official said the agreement carries major implications and should ideally have been signed after the election to allow broader political and public discussion.
Political timing draws criticism
Economists and analysts have also questioned why an unelected interim administration is finalising a major trade agreement so close to national elections. They argue that responsibility for implementing the deal will fall on the incoming elected government.
A prominent economist criticised the process as lacking transparency and warned that the country could be pushed into long-term commitments without adequate scrutiny or public consent.
Meanwhile, US diplomats have indicated openness to engaging with various political forces in Bangladesh, including Jamaat-e-Islami, which has been banned multiple times in the country’s history.