Indian Textile Body Sees Gains In US Cotton Shift
The texpreneuts body says Bangladesh’s reported cotton-for-garment swap with the US offers an advantage, but India can compete if reciprocal terms emerge.
The Gist
India's textile industry is eyeing opportunities from shifting global cotton trade, despite uncertainties around a US-Bangladesh arrangement.
- Bangladesh exports $38–40 billion in garments annually, with the EU as its largest market.
- A potential US-Bangladesh quota swap could provide Bangladesh duty-free access for garments made from US cotton.
- India's textile sector, with modern spinning capacity, could benefit from similar tariff terms, potentially increasing exports significantly.
India’s textile industry sees a potential opportunity in shifting global cotton trade flows, even as details of a reported US-Bangladesh arrangement remain fluid, according to the president of the Indian Texpreneurs Federation (ITF).
Prabhu Dhamodharan, who heads the Coimbatore-based industry body representing about 450 spinning and apparel companies, said Bangladesh exports $38–40 billion worth of garments annually, with the European Union as its largest market and the United States accounting for about 20% of shipments.
Recent reports suggest Bangladesh may have secured a national-level quota swap arrangement with the United States, under which purchases of US cotton could translate into equivalent volumes of garments receiving duty-free access. “It is not product by product,” Dhamodharan said, cautioning that information was still evolving and needed verification.
He said while such an arrangement would give Bangladesh an advantage, structural constraints could limit its impact. Bangladesh’s spinning industry has been struggling, with 30–40% of spindle capacity reportedly shut in recent months due to high energy costs and weak competitiveness. The country remains a marginal player in yarn and fabric, relying heavily on India, China and Vietnam for inputs.
“Even if US cotton comes, they don’t have major capacity to spin and make fabric to make it a game changer,” he said, though he added that Dhaka may attempt structural shifts over time.
Dhamodharan argued India could compete effectively if similar reciprocal tariff terms were available. The U.S. typically allows duty-free access if 20% of content is of US origin, he said, adding that a 100% US-origin product would naturally qualify for concessions. “We don’t know whether India got such kind of a deal,” he said.
India produces 300–320 lakh bales of cotton annually and imports 20–30 lakh bales, sometimes exporting similar volumes depending on prices. Cotton dominates India’s textile exports, with 70–80% of apparel and home textile shipments to the US and Europe comprising cotton products.
India exports about $5 billion of apparel and $2.7 billion of home textiles to the US, and $7.23 billion to the European Union. The UK accounts for another $1.8 billion, taking total shipments to these three markets to roughly $16.7 billion.
Dhamodharan said India’s robust and modernising spinning and weaving capacity — including Rs 6,000–7,000 crore worth of advanced weaving machines installed this year — positions it well to process US cotton.
He noted China, once buying 35–40% of US cotton, has reduced purchases to below 5% and shifted to Brazil, creating a need for alternative markets.
ITF estimates exports to the EU and UK could grow at a 15% compound annual rate over five years, aided by free trade agreements, while US growth may reach 7–8%. Combined exports to the three markets could rise from $17 billion to $29 billion by 2031.
“If zero duty advantage of US cotton also comes to India,” he said, monthly apparel exports could touch $1.5 billion from the next financial year, with 15% annual growth achievable thereafter.
Listen to the full interview on The Core Report here.
