Bangladesh, Cambodia and Indonesia are suffering a lot of damage in the textile industry due to American tax
US President Donald Trump has created a stir in the global textile market by putting heavy tariffs on countries like Bangladesh, Cambodia and Indonesia. For these countries, this tariff is no less than a major economic shock, but for India it has come out as a golden opportunity. A recent report by State Bank of India (SBI) claimed that by taking advantage of these tariffs, India can take its textile exports to new heights. Come, let’s know how India can redeem this opportunity and why the condition of countries like Bangladesh is getting worse.
Why is this lottery chance for India?
According to SBI report, America’s textile import market is very large, and India’s share in it is just 6 percent. If India increases this stake by 5 percent, then it can prove to be a game-changer for the country’s economy. This may increase India’s GDP by 0.1 percent. India already holds a strong hold in the chemical and textile industry. Now the new tariff rules of America have given India a chance to move forward in these areas.
The report clearly states that countries like Bangladesh, Cambodia and Indonesia are suffering heavy losses due to strict tax rules of America. Textile exports from these countries will now become expensive, so that American buyers can turn to cheap and reliable options like India. That is, India has a big opportunity to snatch the market share of these countries.
Why did Bangladesh, Cambodia, Indonesia get worse?
If we look at the 2024 figures, the US imports the most clothes and related items from these countries. Bangladesh sends 88.2 percent of its total exports to the US in the form of clothes. At the same time, Cambodia exports 30.8 percent and Indonesia 15.3 percent of the cloth. But Trump’s new tariff rules have broken the back of these countries. Now they will have to pay more tax to America, which will make their clothes expensive in the American market.
Bangladesh’s textile industry is the backbone of its economy, which gives more than 80 percent exports and employment to about 40 lakh people. But 35 percent tariff killed has put it in trouble. Cambodia and Indonesia are also in the grip of this tariff, which is decreasing their competitive capacity. On the other hand, India has only 10 percent baseline tariff, which makes it cheaper and attractive in the US market.
Not only cloth, India will shine in these areas too
It has also been told in the SBI report that India can benefit not only in the textile industry but also in many other areas. India can strengthen its grip in areas such as goods related to farming, livestock and products made from them. Due to the expensive imports from the countries on which the US has increased the tariff, India can also get new orders in these areas.
The report suggested that India should take full advantage of this business change. Especially in sectors where India is already strong. If India proceeds with the right strategy, then it can collect its not only in the cloth but also in many other areas.