Bangladesh's ready-made garment (RMG) sector is poised for a significant lift after securing a 19 per cent reciprocal duty exemption on apparel exports to the United States made from US cotton - a move exporters say could unlock fresh opportunities in the country's largest single market.
The breakthrough follows the signing of the Agreement on Reciprocal Trade (ART) between Dhaka and Washington on Monday, a pact expected to elevate bilateral economic ties and strengthen trade flows between the two nations.
Under the new arrangement, the countervailing duty imposed on Bangladeshi goods has been reduced from 20 per cent to 19 per cent. Bangladesh garments produced using US cotton will enjoy a 19 per cent reciprocal duty exemption, effectively bringing the applicable countervailing duty down to zero for those products.
For an industry that sends roughly 19 per cent of its total RMG exports to the United States, the implications are substantial. Exporters believe the facility will not only stimulate shipments but also reinforce Bangladesh's competitive position in the global apparel market.
According to data from the US Office of Textiles and Apparel (OTEXA), the United States imported garments worth $7.6 billion from Bangladesh between January and November 2025, up from $6.76 billion in the same period a year earlier. Of that total, approximately $5.18 billion comprised cotton-based apparel, while the remainder was non-cotton items.
In 2025, Bangladesh exported around $38.82 billion worth of apparel globally, with nearly $8 billion destined for the US market. Industry leaders say the new zero-duty window for garments made from US cotton could significantly expand that figure in the coming years.
Analysts suggest that sourcing more raw cotton from the United States and manufacturing finished apparel locally could create a mutually beneficial trade dynamic.
By aligning raw material imports with preferential export treatment, Bangladeshi manufacturers would be able to offer more competitive pricing to American buyers while preserving margins.
There are also proposals under discussion to extend special facilities to non-cotton garments.
Currently, about 30 per cent of Bangladesh's apparel exports to the US consist of non-cotton products, indicating considerable scope for diversification and growth in man-made fibre segments.
Faisal Samad, a director of the Bangladesh Garment Manufacturers and Exporters Association (BGMEA), described the new trade regime as a "strategic opportunity" for the RMG sector, particularly for products manufactured using US cotton and man-made fibres.
Echoing that view, Engineer Rajib Haider, a former director of the Bangladesh Textile Mills Association (BTMA), said additional duty concessions for yarn and garment production using US cotton could generate positive momentum across the textile value chain.
"This arrangement strengthens Bangladesh's competitive edge in the US market," he noted.
However, industry leaders caution that the benefits will not materialise automatically. BGMEA has emphasised the need for robust traceability systems to verify the use of US raw materials and ensure compliance with agreement conditions.
Moreover, while US cotton is widely regarded as high quality, it is also relatively expensive.
Exporters stress that local spinners must ensure competitive yarn pricing to maximise the advantage of duty-free access.
If effectively leveraged, the ART agreement could mark a turning point for Bangladesh's apparel trade with the United States - deepening supply-chain integration, enhancing market access and providing a timely boost to an industry that remains the backbone of the country's export economy.
