Editor’s Note
This article highlights a sharp decline in textile company shares following a new U.S.-Bangladesh tariff agreement, underscoring how international trade policies can trigger immediate market reactions.
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Shares of textile companies were under pressure, falling up to 9 per cent on the BSE in Tuesday’s intra-day trade in an otherwise firm market on profit booking. The selling on the counter came after the United States (US) and Bangladesh had signed a reciprocal tariff agreement, wherein the US had agreed to reduce tariffs on Bangladesh from 20 per cent to 19 per cent.
Among the individual stocks, Pearl Global Industries dipped 9 per cent to ₹1,638.75, followed by Arvind (down 6 per cent at ₹365.3), Gokaldas Exports (6 per cent at ₹792.5), Kitex Garments (5 per cent at ₹204.45), Vardhman Textiles (5 per cent at ₹480.05), KPR Mill (5 per cent at ₹935.1), Welspun Living (5 per cent at ₹137.9), Trident (4 per cent at ₹27.15) and Indo Count Industries (3 per cent at ₹298.9). In comparison, the BSE Sensex was up 0.26 per cent at 84,286, at 1:53 PM.
Despite today’s decline, in the past month, these stocks have outperformed the market, surging up to 33 per cent, as against a 0.56 per cent rise in the benchmark Sensex.
Bangladesh earlier had a tariff of 37 per cent, which was reduced to 20 per cent in August 2025, and it has been reduced further to 19 per cent post the agreement. Also, the US has agreed for Nil tariff on certain textile and apparel products from Bangladesh where US cotton and man-made fibers are used.
For instance, if a T-shirt contains 70 per cent American cotton and yarn by value, US customs authorities will exempt that portion from the 19 per cent reciprocal tariff imposed on Bangladeshi goods. The agreement was approved on February 9 and shall come into force once official notifications are issued by both countries, ICICI Securities said in a note.
Further, India and other textile manufacturing countries can also enter into a similar agreement with the US government. For India opening up of large export markets such EU/UK, along with US, will provide a bigger advantage and competitive edge for Indian textile manufacturers, ICICI Securities said.