Can the US become a top import source for Bangladesh?

Bangladesh is well connected with major global players in international trade. China, the world’s second-largest economy and largest manufacturing hub, is its largest import source. The neighbouring India, the fourth-largest economy, is second. The United States is the single largest export destination.

Local manufacturers depend heavily on industrial raw materials, machinery and food items from China and India, making the two the top sourcing destinations.

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In fiscal year 2024-2025 (FY25), Bangladesh imported goods worth $18.19 billion from China, up from $16.63 billion in FY24, according to Bangladesh Bank data. Imports from India stood at $9.62 billion, up from $9 billion, according to National Board of Revenue (NBR) data.

The US has largely been an export destination for Bangladesh, but that is beginning to shift. Imports from the US rose to $2.72 billion in FY25 from $2.53 billion in FY24, as per BB. Exports to the US stood at $8.69 billion in FY25.

While imports from the country had been growing steadily over the years, the Agreement on Reciprocal Trade (ART), signed on February 9, is encouraging further purchases to narrow that nearly $6 billion gap.

The required purchases, ranging from energy, commodities, aircraft, military equipment and more, amount to billions of dollars.

The developments have raised a question for Bangladesh’s trade landscape: can the US eventually overtake China and India as a major source of imports?

According to economists and trade leaders, the answer depends largely on what Bangladesh needs to import.

MA Razzaque, chairman of the Research and Policy Integration for Development (RAPID), said it would be difficult for the US to overtake China and India given Bangladesh’s import and consumption pattern, which is closely tied to its textile and garment industry.

The country imports large quantities of cotton, yarn, fabrics, dyes, chemicals, machinery and other industrial inputs, and China and India have extensive supply chains for most of these products.

“The US goods are expensive and China is the most efficient supply chain manager globally now,” Razzaque said.

The US, despite being a major cotton exporter, lacks a comparable production base for fabrics, yarn, and many chemicals and accessories used by Bangladesh’s apparel industry.

Corn illustrates the gap. Bangladesh resumed importing US corn in market year 2025-26 after a seven-year gap, but the US supplied only around 1.11 lakh tonnes of it or about 6 percent of the country’s corn imports.

Brazil remained the dominant supplier at 68 percent, followed by India at 24 percent, according to a USDA report.

Bangladesh sources other key commodities elsewhere. Cotton is sourced from India, African countries, Australia and Argentina; soybean largely from Brazil and Argentina; and wheat from Russia, Ukraine and European countries.

Of the roughly 6.6 million tonnes of wheat Bangladesh imported in MY2025-26, most came through the private sector, according to Ministry of Finance data, with the government importing the rest.

The US, however, is a major global supplier of agricultural commodities and energy, and the ART could allow American suppliers to gain share in these categories without displacing China and India more broadly.

Under the agreement, Bangladesh shall “endeavour” in purchasing or facilitating the purchase of US liquefied natural gas worth an estimated $15 billion over 15 years, along with wheat, soy and cotton worth a combined $3.5 billion.

On wheat specifically, under an agreement between the food ministry and US Wheat Associates, Bangladesh has committed to buying up to 7 lakh tonnes of US wheat annually through 2030. It purchased around 7.45 lakh tonnes in MY2025-26 and has already contracted 2.2 lakh tonnes for the current marketing year.

Under ART, Bangladesh has also been encouraged to increase purchases of US military equipment while limiting procurement from certain other countries.

It also requires increased purchases of US civilian aircraft, parts, and service by Biman Bangladesh Airline.

Biman has placed orders for 11 Boeing aircraft this week, which are estimated to cost $2.25 billion. Earlier in April, the national flag carrier signed another deal with Boeing to purchase 14 aircraft for $3.7 billion.

Private carrier US-Bangla Airlines, in July, also announced a deal to acquire 21 Boeing aircraft worth approximately $1.5 billion.

To facilitate greater access for US goods, Bangladesh has agreed to treat US regulatory approvals as sufficient on their own.

American-approved medicines, medical devices, dairy, meat, poultry and biotech crops can enter Bangladesh on US certification alone, without separate testing or re-authorisation by Bangladeshi regulators. Bangladesh has also agreed not to require prior testing of imported US agricultural goods.

Both sides have also agreed to reduce barriers on a range of American goods, including zero-duty access for Bangladeshi apparel made with US cotton and man-made fibre. The commercial impact for exporters of the zero-duty facility remains unclear as the exact volume of duty-free apparel allowed under the system is yet to be decided.

The agreement extends well beyond tariffs. It bars Bangladesh from signing “new free trade agreement or preferential economic agreement with a non-market country” that undermines the ART, on pain of the US reimposing its earlier reciprocal tariff.

The agreement does not name specific countries, but the US Commerce Department’s standing non-market-economy list, used for anti-dumping enforcement, includes China and Russia.

Amirul Haque, president of the Chittagong Chamber of Commerce and Industry, who represented the private sector in the ART negotiations, said the US needs to weigh Bangladesh’s market and economic structure.

“In normal goods export, it is not possible to overtake China and India,” he said.

Distance is a further constraint. Bangladeshi importers typically receive goods from China and India faster than from the US, and longer shipping times raise freight, inventory and financing costs, a significant factor for Bangladesh’s fast-moving manufacturing sector.

The US does hold an edge in high-value goods.

“The US can overtake China and India in high-valued items such as medical equipment, high-tech items, LNG, semiconductors and aircraft,” said Syed Ershad Ahmed, immediate past president of the American Chamber of Commerce in Bangladesh.

He, however, added that it is not feasible for the US to overtake China and India in terms of cotton, soybean and wheat exports to Bangladesh.