India-EU free trade deal may affect Bangladesh’s garment market: Report
Business Desk :
India’s historic free trade agreement with the European Union (EU) is already reverberating across South Asia, with Bangladesh and Pakistan among the countries most immediately affected, bdnews24.com reports citing Zee News.
The deal will eliminate or sharply reduce tariffs on over 90 percent of EU exports to India, including machinery, chemicals, and pharmaceuticals, enabling New Delhi to expand its presence in the European market, reports bdnews24.com
For Bangladesh, the impact is direct. With India now entering the EU at lower tariffs, Bangladeshi exporters face intensified competition.
Indian Commerce Minister Piyush Goyal was quoted as saying, “India can boost textile exports to Europe from $7 billion to $30-40 billion quickly.
“We were always asked how Bangladesh exports so much to Europe. They had zero duties and captured a $30 billion share.”
Pricing and quality competition from Indian garments could shrink Bangladesh’s market share in the near term, the report added.
Pakistan, struggling with economic fragility, views the deal with concern, it said.
Zee News notes that Islamabad fears closer India-EU trade and strategic cooperation, including counter-terrorism partnerships, could disadvantage Pakistan-backed Khalistani groups active in Europe.
Turkey is also indirectly affected. Relations between Ankara and New Delhi have been strained since Turkey supported Pakistan during Operation Sindoor, according to Zee News.
Under the EU-Turkey Customs Union, Ankara is obliged to match tariff reductions given to EU partners like India, without reciprocal benefits.
Zee News observes that previous concerns raised by Turkey on this asymmetry have seen little resolution.
Beyond South Asia, the agreement has unsettled the United States, where stalled Indo-US trade talks now contrast with Europe’s growing economic partnership with India, Zee News reported.