US-Bangladesh pact unlikely to impact India's pharma, medtech exports

Industry executives say the US-Bangladesh reciprocal trade agreement is unlikely to materially affect India's pharma and medtech exports, given India's scale and established FDA-approved supply chains

The United States and Bangladesh have finalised a bilateral reciprocal trade agreement aimed at deepening economic ties, but industry executives say it is unlikely to materially impact India’s pharmaceutical and medical device exports, despite concessions granted to Dhaka on tariffs and market access.

 

Under the revised framework, Bangladeshi exports to the US will attract a 19 per cent tariff, marginally lower than the 20 per cent imposed in August and sharply below the earlier reciprocal rate of 37 per cent.

 

In return, Dhaka has agreed to address non-tariff barriers (NTBs) by recognising vehicles built to US federal safety and emission standards, and accepting US Food and Drug Administration (FDA) certificates for pharmaceuticals and medical devices.

 

While the agreement signals deeper US–Bangladesh trade integration, industry experts say its implications for India, particularly in the automotive sector, are limited.

 

Bangladesh has very few medtech exports to the US, which may be even less than $50 million per annum. “This mainly includes personal protective equipment (PPE), along with some hospital furniture, syringes and needles,” a medical device executive told Business Standard.

 

In contrast, India’s medtech exports to the US were recorded at $787.57 million in FY25, a 9.55 per cent rise from $714.30 million in FY24.

 

Even though it is a small competitor, Pavan Choudary, chairman at the Medical Technology Association of India (MTaI), said that Dhaka retains some competitive advantage, especially in PPE exports.

 

“The Bangladeshi government provides a 6 per cent cash incentive (subsidy) on the export of medical and surgical instruments and appliances,” he said.

 

Choudary added that Bangladeshi manufacturers also benefit from a 50 per cent tax exemption on income derived from exports, a policy slated to last until at least 2028. This becomes their competitive advantage, particularly in PPE exports.

 

A pharma executive added that since the pharmaceutical sector is exempt from reciprocal tariffs, the question of Bangladesh gaining any competitive edge does not arise in this segment.

 

At $10.52 billion, the US market is the largest export destination for Indian pharma companies, accounting for 34.6 per cent of the country’s $30.38 billion worth of pharmaceutical exports in the financial year 2025 (FY25).

 

Bangladesh’s pharmaceutical exports to the US are approximately $20–25 million annually.

 

“India retains a strong, often superior, competitive edge over Bangladesh due to its massive scale of low-cost generics and established FDA-approved supply chains,” the analyst quoted above added.