India-US trade deal: Rahul slams govt over tariff exemptions to Bangladesh and India

Leader of Opposition in the Lok Sabha, Rahul Gandhi, on Saturday (February 14) alleged that Prime Minister Narendra Modi and the Centre were misleading the country with regard to the tariff provisions in the India-US interim trade agreement.

The Congress MP argued that while Indian made textile imports to the US face an 18 per cent tariffs while, garments exports from Bangladesh have zero tariffs, provided that Dhaka imports US-made cotton.

Elaborating further, Rahul, in a post on X stated that when he raised the issue in Parliament, a minister responded saying that if India wants the same facility that it too has to import cotton from the US.

On US cotton import issue

Rahul argued that if India has to import cotton from the US, it would inflict financial harm on domestic farmers, adding that if it does not then the country would lag behind Bangladesh in terms of textile and garments exports. He claimed that the situation was likely to become worse as Bangladesh was indicating that it might reduce or altogether halt importing cotton from India.

Also Read: Rahul meets farm unions over plan to protest against India–US trade deal

"18% Tariff vs 0% -- Let me explain how the expert liar Prime Minister and his cabinet are spreading confusion on this issue. And how they are cheating India's cotton farmers and textile exporters through the India-US trade deal. Bangladesh is being given 0% tariff benefit on garment exports to the US -- the only condition is that they import American cotton,” stated Rahul.

“After the announcement of 18% tariff on Indian garments, when I raised the question in Parliament about the special concession being given to Bangladesh, the reply from a minister of the Modi government was: "If we also want the same benefit, we will have to import cotton from America." Why was this fact hidden from the country till now?” he added.

‘Trade deal will lead to unemployment’

Alleging that the interim trade agreement would push millions towards unemployment and economic distress, Rahul criticised the Centre’s handling of the situation. He stated that a trade deal made in the national interest should have safeguarded.

Also Read: India to get zero-tariff textile access to US similar to Bangladesh, says Goyal

"And what kind of policy is this? Is this really any kind of choice -- or is it a trap designed to push us into a "well in front, ditch behind" situation? If we import American cotton, our own farmers will be ruined. If we don't import it, our textile industry will lag behind and get destroyed. And now Bangladesh is also giving signals that it may reduce or even stop importing cotton from India," stated Rahul.

"The textile industry and cotton farming are the backbone of livelihood in India. Crores of people's daily bread depend on these very sectors. Attacking these sectors means pushing millions of families into the pit of unemployment and economic crisis. A visionary government that thinks in the national interest would have negotiated a deal that protects and ensures the prosperity of both cotton farmers and textile exporters. But exactly the opposite has happened -- Narendra "Surrender" Modi and his ministers have made an agreement that is likely to inflict deep damage on both sectors."

The backdrop

The India-US Interim Agreement, unveiled last week, has been presented as a foundational step toward a reciprocal trade arrangement between the two countries. The proposed framework outlines tariff reductions or removals on a range of American industrial goods, along with several food and agricultural items slated for entry into the Indian market.

Also Read: Rahul Gandhi slams India-US interim trade deal, calls it ‘wholesale surrender’

Among the products identified are dried distillers' grains, red sorghum used in animal feed, various tree nuts, fresh and processed fruits, soybean oil, wine and spirits, as well as other agricultural and related commodities. The understanding is positioned as mutually beneficial, with both sides adjusting duties in phases.

In exchange, the United States is set to impose a reciprocal tariff of 18 per cent on certain Indian exports. The affected categories include textiles and apparel, leather goods, footwear, plastics, rubber products, organic chemicals, home décor items, artisanal products, and select machinery.

The agreement also outlines that once fully implemented, US tariffs on specific Indian exports, including generic pharmaceuticals, gems and diamonds, and aircraft components, would be eliminated.