Bangladesh and the United States have concluded a reciprocal trade agreement that reshapes bilateral market access across textiles, industry and agriculture, with notable implications for the regional dairy trade. The deal reduces US tariffs on Bangladeshi exports to 19 per cent and grants zero-tariff access to selected textile and apparel products manufactured using US-origin cotton and man-made fibres. In return, Bangladesh has committed to widening access for US industrial and agricultural exports, including dairy products, soy, beef, poultry, tree nuts and fruit.
Negotiated over nine months, the agreement seeks to deepen economic ties, ease long-standing trade barriers and diversify bilateral commerce, while stopping short of across-the-board tariff elimination.
Agricultural and Dairy Access at the Core
A key feature of the pact is Bangladesh’s decision to offer preferential access to US agricultural exports. For American dairy and soy producers, this represents entry into a fast-growing South Asian consumption market that has historically relied on regional suppliers and limited imports due to tariff and procedural constraints.
The agreement also includes phased tariff reductions, product-specific commitments and conditional implementation mechanisms, such as rules of origin for textiles. These provisions suggest a calibrated opening rather than an immediate flood of imports, allowing Bangladesh some policy space to manage domestic sensitivities.
Beyond tariffs, Dhaka has pledged to purchase approximately USD 3.5 billion worth of US agricultural goods and nearly USD 15 billion in energy products over the next 15 years, signalling a broader strategic commercial alignment rather than a narrow trade concession.
Strategic Gains for Bangladesh
For Bangladesh, the deal strengthens access to the world’s largest consumer market, particularly for its readymade garment sector, which employs millions and underpins export earnings. The zero-tariff window for garments made with US inputs is designed to integrate Bangladesh more closely into US-led value chains while supporting employment and export diversification.
At the same time, increased agricultural imports place pressure on domestic producers, requiring careful balancing of consumer affordability, food safety standards and local sector resilience.
Implications for India’s Dairy Exports
Although India is not a party to the agreement, the opening of Bangladesh’s dairy market to US suppliers has indirect but important implications for Indian exporters. Competitive pressure is likely to intensify in dairy ingredients such as skim milk powder, whey and specialised proteins segments where US producers benefit from scale, advanced processing technology and consistent policy support.
Any tariff or procedural advantage extended to US dairy products could erode India’s pricing edge in Bangladesh, particularly during India’s flush season, when exportable surpluses rise, and margins are already under pressure.
India’s Structural Strengths and Emerging Risks
India retains several structural advantages: geographic proximity, shorter delivery timelines, flexible shipment sizes and strong cultural and trade linkages with Bangladesh. These factors continue to favour Indian dairy, especially in conventional products and bulk commodities.
However, the longer-term risk lies in demand shifting towards value-added and functional dairy ingredients. This is an area where Indian exporters still lag behind US suppliers in terms of scale, consistency and product standardisation. As Bangladesh’s food processing and nutrition sectors evolve, the competitive landscape may tilt towards suppliers offering higher-value formulations rather than basic commodities.
A Policy Signal for India
The Bangladesh–US trade deal should be read as a strategic signal for India’s dairy sector. While immediate disruption to exports may be limited, the agreement raises the bar on product sophistication, cost efficiency and trade diplomacy. Strengthening bilateral engagement with Bangladesh, investing in export-ready dairy ingredients and moving beyond commodity-led strategies will be critical for sustaining India’s competitiveness in the region.
In the medium to long term, regional dairy trade dynamics will be shaped less by proximity alone and more by value addition, regulatory alignment and strategic trade partnerships.