Monday, 01 September, 2025
Experts believe that the imposition of a 50 percent US tariff on Indian exports could shift significant orders to Bangladesh, providing the country with an opportunity to boost exports by billions of dollars if local entrepreneurs and exporters are able to seize the moment effectively.
On 31 July, the US administration imposed reciprocal tariffs of 19 percent on Cambodian and Indonesian goods and 20 percent on Bangladeshi products, while Indian goods were hit with a 25 percent duty. Additionally, as a “penalty” for purchasing crude oil from Russia, US President Donald Trump announced an extra 25 percent duty on Indian products, raising the total tariff on Indian goods entering the US to 50 percent.
Economists and industry leaders say that the higher duties on Indian products could provide Bangladesh with an opportunity to increase exports of key items. Indian exporters are expected to lose competitiveness in categories such as ready-made garments, home textiles, processed agricultural foods, leather goods, frozen fish and shrimp, and furniture — all major Bangladeshi export items. Consequently, US orders may shift to Bangladeshi suppliers.
Dr Zahid Hussain, former Lead Economist of the World Bank’s Dhaka office, told BSS that the 50 percent US tariff on Indian goods would heavily impact items like RMG and footwear. “There will be a diversion of exports to other countries. On the whole, Bangladesh will be among the primary beneficiaries, alongside Vietnam, China and Myanmar,” he said.
Dr Hussain added that Bangladesh could increase exports to the US by $2–3 billion if stakeholders act decisively. “The key is whether we can fully tap this potential. Capacity of stakeholders and uninterrupted energy supply are crucial,” he noted. He also highlighted that the lowering of the US reciprocal tariff on Bangladesh to 20 percent has placed the country in an advantageous position, unlikely to change in the next six months.
The economist emphasised that uncertainties must be converted into opportunities, urging the government and stakeholders to take swift action. “Previously closed factories are reopening, anticipating better outcomes from the higher Indian tariffs,” he added. He also recommended improving port efficiency, resolving issues at the National Board of Revenue (NBR), easing congestion at the ICD, addressing worker unrest, and ensuring uninterrupted power and gas supplies.
Mahmud Hasan Khan, President of the Bangladesh Garment Manufacturers and Exporters Association (BGMEA), echoed the views, saying there would be opportunities for Bangladesh if local exporters act promptly. “Some orders will divert from India, and we have a strong chance to boost exports. But we must improve efficiency at Chattogram Port, reduce lead time, and ensure smooth transportation and energy supply,” he said.
Mohammad Hatem, President of the Bangladesh Knitwear Manufacturers and Exporters Association (BKMEA), also stressed the importance of addressing banking sector issues, resolving power and energy shortages, and streamlining operations at NBR and Customs. “Healthy industries are essential to capitalise on these opportunities. If industries struggle, the benefits will be lost,” he noted. Hatem urged the government to restore discipline in banking, fully operationalise back-to-back L/C facilities, rationalise interest rates, and enforce zero tolerance in law and order, which he said is critical for achieving FY26 export targets.
Currently, Bangladesh maintains a trade gap of $6 billion with the US, exporting $8.2 billion in goods while importing $2 billion. India, whose total exports reached $434 billion in the year ending March 2025, relies heavily on the US, with nearly 20 percent ($86.51 billion) of its exports shipped there.
Experts conclude that with the right strategies, policy support, and infrastructure improvements, Bangladesh is well-positioned to capture a significant share of the market left by Indian exporters and boost its exports to the United States.
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Experts believe that the imposition of a 50 percent US tariff on Indian exports could shift significant orders to Bangladesh, providing the country with an opportunity to boost exports by billions of dollars if local entrepreneurs and exporters are able to seize the moment effectively.
On 31 July, the US administration imposed reciprocal tariffs of 19 percent on Cambodian and Indonesian goods and 20 percent on Bangladeshi products, while Indian goods were hit with a 25 percent duty. Additionally, as a “penalty” for purchasing crude oil from Russia, US President Donald Trump announced an extra 25 percent duty on Indian products, raising the total tariff on Indian goods entering the US to 50 percent.
Economists and industry leaders say that the higher duties on Indian products could provide Bangladesh with an opportunity to increase exports of key items. Indian exporters are expected to lose competitiveness in categories such as ready-made garments, home textiles, processed agricultural foods, leather goods, frozen fish and shrimp, and furniture — all major Bangladeshi export items. Consequently, US orders may shift to Bangladeshi suppliers.
Dr Zahid Hussain, former Lead Economist of the World Bank’s Dhaka office, told BSS that the 50 percent US tariff on Indian goods would heavily impact items like RMG and footwear. “There will be a diversion of exports to other countries. On the whole, Bangladesh will be among the primary beneficiaries, alongside Vietnam, China and Myanmar,” he said.
Dr Hussain added that Bangladesh could increase exports to the US by $2–3 billion if stakeholders act decisively. “The key is whether we can fully tap this potential. Capacity of stakeholders and uninterrupted energy supply are crucial,” he noted. He also highlighted that the lowering of the US reciprocal tariff on Bangladesh to 20 percent has placed the country in an advantageous position, unlikely to change in the next six months.
The economist emphasised that uncertainties must be converted into opportunities, urging the government and stakeholders to take swift action. “Previously closed factories are reopening, anticipating better outcomes from the higher Indian tariffs,” he added. He also recommended improving port efficiency, resolving issues at the National Board of Revenue (NBR), easing congestion at the ICD, addressing worker unrest, and ensuring uninterrupted power and gas supplies.
Mahmud Hasan Khan, President of the Bangladesh Garment Manufacturers and Exporters Association (BGMEA), echoed the views, saying there would be opportunities for Bangladesh if local exporters act promptly. “Some orders will divert from India, and we have a strong chance to boost exports. But we must improve efficiency at Chattogram Port, reduce lead time, and ensure smooth transportation and energy supply,” he said.
Mohammad Hatem, President of the Bangladesh Knitwear Manufacturers and Exporters Association (BKMEA), also stressed the importance of addressing banking sector issues, resolving power and energy shortages, and streamlining operations at NBR and Customs. “Healthy industries are essential to capitalise on these opportunities. If industries struggle, the benefits will be lost,” he noted. Hatem urged the government to restore discipline in banking, fully operationalise back-to-back L/C facilities, rationalise interest rates, and enforce zero tolerance in law and order, which he said is critical for achieving FY26 export targets.
Currently, Bangladesh maintains a trade gap of $6 billion with the US, exporting $8.2 billion in goods while importing $2 billion. India, whose total exports reached $434 billion in the year ending March 2025, relies heavily on the US, with nearly 20 percent ($86.51 billion) of its exports shipped there.
Experts conclude that with the right strategies, policy support, and infrastructure improvements, Bangladesh is well-positioned to capture a significant share of the market left by Indian exporters and boost its exports to the United States.
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