US Overtakes India as Bangladesh’s Second-Largest Trading Partner: What It Means for Indian Exporters

Bangladesh is one of India’s important neighboring trade markets, offering opportunities for Indian manufacturers, merchant exporters and small and medium-sized enterprises (SMEs). However, recent trade data indicates a shift in Bangladesh’s trading relationships, with the United States (US) overtaking India to become Bangladesh’s second-largest trading partner in the financial year 2024–25.

According to reports citing Bangladesh’s National Board of Revenue (NBR), bilateral merchandise trade between Bangladesh and the US reached approximately US$12.67 billion in FY 2024–25, putting the US ahead of India. China retained the top position. The change reflects evolving import patterns, trade policies and the growing importance of Bangladesh in global supply chains.

What does this development mean for Indian exporters? Does it signal declining opportunities in Bangladesh, or could it create new opportunities for Indian businesses? Let’s examine the reasons, risks and potential opportunities for Indian exporters.

What Has Changed in Bangladesh’s Trade Rankings?

Bangladesh’s trade relationship are evolving as the country sources products from different global markets and sells its manufactured goods to international buyers.

According to reports citing Bangladesh’s NBR, the trade position for FY 2024–25 was as follows:

China – 22.92 USD billion
USA – 12.67 USD billion
India – 10.72 USD billion (Approx)

Source: September 2026 reporting citing Bangladesh’s National Board of Revenue. Figures refer to FY 2024–25, July 2024–June 2025, and are rounded.

This development should not be interpreted as India losing its importance in Bangladesh’s trade. India remains a major supplier because of its geographical proximity, established business relationships and access to a wide range of products.

It is also important to distinguish annual rankings from monthly rankings. The US and India have exchanged positions in individual months of 2026, showing that the ranking can change as trade flows fluctuate.

What Does This Mean for Indian Exporters?

For Indian exporters, the change is both a warning and an opportunity. It highlights the need to understand Bangladesh’s changing import requirements rather than relying only on its historical position as a nearby market.

Opportunity 1: Supply raw materials to Bangladesh’s garment industry

Bangladesh has a large export-oriented garment industry. Manufacturers need textile inputs to produce garments for international buyers.

Indian exporters can explore opportunities in:

Cotton yarn and man-made yarn
Woven fabrics and knitted fabrics
Textile accessories and garment-related inputs
Other suitable textile raw materials

Indian suppliers should compete through consistent quality, competitive prices, reliable delivery and dependable buyer service.

Opportunity 2: Explore agricultural and food products

Bangladesh imports agricultural products and food-related commodities to meet domestic demand and industrial requirements.

Indian exporters can investigate opportunities in:

Fresh vegetables and selected fruits
Spices and processed food products
Other agricultural commodities with established import demand

However, exporters must verify current demand, import permissions, phytosanitary requirements, applicable standards and border procedures before entering the market.

Opportunity 3: Target engineering goods and industrial supplies

Bangladesh’s manufacturing, construction and transport sectors create demand for industrial products and equipment.

Indian SMEs can research opportunities in:

Engineering goods and industrial components
Machinery and spare parts
Electrical products
Two-wheelers, three-wheelers and related components

The most suitable product will depend on Bangladesh’s current import data, competition, technical requirements and the exporter’s ability to supply at a competitive landed cost.

Opportunity 4: Use geographical proximity as a competitive advantage

India shares a land border with Bangladesh. Depending on the shipment route and product, this can provide advantages in transport time, replenishment and communication.

For products where delivery speed and regular supply matter, Indian exporters can use these advantages to compete with more distant suppliers.

However, proximity alone does not guarantee lower costs. Freight, customs procedures, border congestion, documentation and local distribution expenses must also be considered.

Should Indian SMEs Be Worried About Losing the Bangladesh Market?

Not necessarily.

A change in trading-partner rankings does not automatically mean that Bangladesh is buying less from India across every product category. Total bilateral trade can increase or decrease because of changes in imports, exports, commodity prices and individual large transactions.

Indian exporters should evaluate the market at the product level.

For example, a merchant exporter of cotton yarn should examine Bangladesh’s imports of cotton yarn, the main supplying countries, current prices and buyer requirements. The overall ranking of the US and India is less useful for this decision than the actual import demand for that product.

Before entering or expanding in Bangladesh, an SME should:

Identify products that Bangladesh regularly imports.
Study import values and trends over the past three years.
Identify competing supplier countries.
Check Bangladesh’s customs duty and applicable import requirements.
Calculate the landed cost of the product.
Verify potential buyers and their payment capability.
Start with a manageable order and establish a reliable supply relationship.

How Can Indian Exporters Strengthen Their Position in Bangladesh?

Indian exporters should focus on competitiveness rather than rankings alone.

First, use product-specific market research. Identify products for which Bangladesh has strong and recurring import demand.

Second, offer reliable supply. Buyers value consistent quality, predictable delivery schedules and responsive communication.

Third, understand customs and compliance. Verify the correct HS code, applicable duties, product standards, permits and documentation requirements before quoting.

Fourth, manage payment risks. Evaluate buyers carefully and choose appropriate payment terms. Where suitable, consider advance payment, letters of credit or other risk-management arrangements.

Finally, diversify export markets. Bangladesh can remain an important destination, but Indian SMEs should also evaluate other markets to reduce dependence on a single country.

Summarizing

For Indian exporters, the right response is to study Bangladesh’s product-level import demand, understand competition and offer reliable, compliant and competitively priced products. Businesses that make decisions using actual trade data rather than rankings alone will be better positioned to identify sustainable export opportunities.