India will get concessional duty access for garments made using American yarn and cotton under its trade agreement with the US, similar to the benefits currently provided to Bangladesh, said Commerce and Industry Minister Mr Piyush Goyal. The United States will reduce reciprocal tariffs on Bangladeshi goods to 19%, but garments attract zero duty only if made with US cotton and man-made fibres. A Bangladeshi garment now faces a 31% levy (12% for most favoured nation plus 19% reciprocal), and if it uses US fibres, then duty falls to 12%. If an Indian company procures yarn and cotton from the US, manufactures garments, and re-exports them to the US, those garments will also receive duty-free access in America, just like Bangladeshi firms, he pointed out, adding that it will not have any impact on Indian cotton farmers, as per a report.
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