Sourcing comparison · 2026

Nepal vs Bangladesh vs India for knit basics

We’re a Nepali factory, so read this knowing our bias — which is why every cell has a source, and Nepal doesn’t win every row.

Nepal, Bangladesh and India compared for knit-basics sourcing
Factor	Nepal	Bangladesh	India
EU import duty – cotton knit T-shirt (CN 6109 10)	0% (Everything But Arms) [1] Standard (MFN) rate is 12%. Requires a REX statement on origin.	0% (Everything But Arms) [2] Same EBA scheme and origin rules as Nepal.	9.6% (standard GSP) to 12% (MFN) – confirm on TARIC [3] The Commission’s 2026–2028 GSP graduation list for India names section S-11a (textile materials) but not S-11b (apparel), which would leave the 9.6% GSP rate; several Indian press reports say apparel now pays the full 12%. The EU–India FTA was concluded in January 2026 and sent to the Council for signature in September 2026; it is not yet in force.
UK import duty – cotton knit T-shirt	0% (DCTS Comprehensive Preferences) [4] UK Global Tariff rate is 12%. Origin declaration on the invoice; no REX needed.	0% (DCTS Comprehensive Preferences) [4]	0% (UK–India CETA, in force 15 July 2026) [5] Textiles and clothing were liberalised from entry into force according to both governments; CETA rules of origin must be met.
Canada import duty – cotton knit T-shirt (6109.10)	0% (Least Developed Country Tariff) [6] MFN is 18%. Since 1 January 2025 garments cut and sewn in an LDC qualify regardless of fabric origin.	0% (Least Developed Country Tariff) [6]	18% (MFN) [6] India is not eligible for LDCT; no Canada–India trade agreement is in force.
Japan import duty – cotton knit T-shirt	0% (LDC preference) [7] Otherwise 7.4% (plain) to 10.9% (printed/yarn-dyed). Knit garments qualify when made from fabric.	0% (LDC preference) [7]	0% (Japan–India CEPA, in force since 1 August 2011) [8] Ready-made garments were in Japan’s immediate-elimination list; CEPA rules of origin apply.
USA import duty – cotton knit T-shirt (as of 24 Sep 2026)	16.5% (MFN only) [9] No preference (NTPP expired 31 Dec 2025; US GSP lapsed). Nepal is not among the 60 economies in the Section 301 forced-labour action effective 24 July 2026.	16.5% MFN + 10% Section 301 = 26.5% [10] USTR is to set up tariff-rate quotas letting some Bangladeshi textiles and apparel made with US cotton or US textile inputs enter free of the Section 301 duty; details not yet published.	16.5% MFN + 10% Section 301 = 26.5% [10] Rates change often; confirm current additional duties with a licensed broker before each order.
LDC graduation and preference outlook	Scheduled to graduate 24 Nov 2026; three-year deferral requested [11] ECOSOC referred the request to the UN General Assembly for a decision before 24 Nov 2026; still pending as of 24 Sep 2026. The EU keeps EBA for three years after graduation actually takes effect (at least to end-2029); the UK and Canada also give three-year transitions.	Scheduled to graduate 24 Nov 2026; three-year deferral requested [12] Same ECOSOC referral and pending UNGA decision as Nepal. Bangladesh has much more at stake: garments are roughly 80% of its merchandise exports.	Not an LDC – access now driven by trade agreements [13] UK–India CETA in force since 15 July 2026; EU–India FTA concluded but awaiting signature and ratification.
EU rule of origin for knit garments	Single transformation – cut and sew from imported fabric qualifies [14] LDC column of Annex 22-03; Chinese or Indian fabric is fine.	Single transformation – cut and sew from imported fabric qualifies [14]	No LDC rule; non-LDC GSP rule is double transformation (from yarn) [14] Only matters if claiming GSP. Goods paying the MFN rate need no preferential origin proof; the EU–India FTA will bring its own rules once in force.
Typical minimum order culture	Lower – smaller factories are used to shorter runs per style Industry norm, not a statistic. Trishakti’s MOQ is 1,000 pcs/style/colour.	Higher – large knit factories are built for volume programmes Industry norm, not a statistic. Smaller units and buying houses can go lower.	Mixed – from small workshops to large vertical mills Industry norm, not a statistic. Knit hubs such as Tiruppur range widely.
Scale of garment exports (latest fiscal year)	Rs 9.30 billion ready-made garments (FY 2082/83, to mid-July 2026) [15] Well under US$100 million – a small, niche industry.	US$38.70 billion RMG (FY 2025-26, July–June) [16] Down 1.64% year on year (Export Promotion Bureau data).	Rs 1,39,349.6 crore ready-made garments (FY 2025-26, April–March) [17] Roughly US$16 billion; total textile and apparel exports incl. handicrafts Rs 3,16,334.9 crore.
Minimum wage for garment workers	NPR 19,550 per month (national minimum, from July 2025) [18]	BDT 12,500 per month (entry grade, set December 2023) [19] RMG-specific wage structure with annual increments; no new wage board award found as of Sep 2026.	Set by state – e.g. about ₹13,000 per month for garment work in Karnataka [20] Karnataka’s May 2026 revision raised most sectors but left garments out (union figure). Other states such as Tamil Nadu set their own rates.
Sea lead time to Northern Europe (indicative)	About 6–8 weeks from factory gate [21] Trucked to Kolkata/Haldia or Visakhapatnam under the Nepal–India transit treaty, then by container. Indicative, varies by carrier and routing.	About 5–7 weeks from factory gate Via Chattogram, usually with feeder transhipment at Colombo or Singapore. Indicative, not a statistic.	About 4–6 weeks from factory gate West-coast ports (Nhava Sheva, Mundra) have direct mainline calls to Europe. Indicative, not a statistic; Red Sea routing affects all three.
Main risks to plan for	Landlocked, small industry, mostly imported fabric [22] All sea freight transits India; fewer factories and few with BSCI/Sedex/WRAP audits; most knit fabric is imported; Gen Z protests in September 2025 brought a change of government; LDC graduation pending.	LDC graduation exposure, 2024–25 political transition [22] Youth-led protests toppled the government in 2024 and an interim administration followed; the EU duty-free advantage ends after the post-graduation transition; 10% US Section 301 tariff.	EU duty until the FTA takes effect; 10% US Section 301 [13] Timing of EU–India FTA ratification is uncertain, and Indian garments carry an extra 10% US tariff since 24 July 2026.

Verified 24 September 2026. Duty and tariff rules change often — confirm your HS line with your customs broker.

Which fits you?

Verdict by buyer type.

Small or growing brand, 1,000–5,000 pcs per style, selling in the EU, UK, Canada or Japan

Nepal or Bangladesh

Both ship at 0% into these markets. Choose Nepal if you want low minimums and to deal directly with the owner; choose Bangladesh if you need a wider choice of factories and local knit fabric.

Large volume programmes where the lowest unit cost wins

Bangladesh

Unmatched knit capacity, fabric base and price at scale, with 0% into the EU, UK, Canada and Japan while LDC preferences last.

UK brand wanting vertical fabric-to-garment supply

India

The UK–India CETA has made Indian clothing 0% since 15 July 2026, and India spins, knits and dyes its own cotton, which helps traceability and development speed.

US market

Compare current tariffs; Nepal has a duty edge today

As of 24 September 2026 Nepal pays MFN only, while Bangladesh and India pay an extra 10% Section 301 tariff (Bangladesh may get quotas for US-cotton garments). Nepal’s sea transit to the US is longer, so compare landed cost, not duty alone.

EU buyer who needs organic or fibre-traceable cotton from one country

India (or Bangladesh)

India is fully vertical from fibre to garment; today it pays EU duty, but the EU–India FTA should remove it once ratified. Nepal relies on imported fabric.

Buyer that requires BSCI, Sedex or WRAP audited factories now

Bangladesh or India

Both have a large pool of audited factories. In Nepal audited capacity is limited, so check each factory individually and plan for an audit.

Hand-knit, wool, cashmere or fair-trade specialty items

Nepal

Nepal has a long-established hand-knit, pashmina and WFTO fair-trade sector that the large-volume countries do not focus on.

Questions

Straight answers.

Longer read: our guide to Nepal vs Bangladesh vs India · why Nepal

Is Nepal cheaper than Bangladesh for knit T-shirts?

Usually not on FOB price at large volumes: Bangladesh has more scale and local knit fabric. Nepal competes on smaller minimums, the same 0% duty in the EU, UK, Canada and Japan, and currently no extra US Section 301 tariff. Compare landed cost for your quantities.

Do Nepal and Bangladesh both pay 0% duty in the EU?

Yes. Both are least developed countries under Everything But Arms, so cotton knitwear that meets the single-transformation rule enters at 0% instead of 12%. Both are due to graduate on 24 November 2026 (deferral requests pending), and the EU keeps EBA for three years after graduation takes effect.

What duty do Indian garments pay in the EU in 2026?

Between 9.6% (standard GSP) and the full 12% MFN rate for cotton T-shirts; official and press sources disagree on whether India’s apparel section lost GSP in 2026, so check TARIC for your code. The EU–India FTA, concluded in January 2026, is expected to remove the duty once signed and ratified.

Are clothes from India duty-free in the UK now?

Yes, for goods meeting the agreement’s rules of origin: the UK–India CETA entered into force on 15 July 2026 and removed UK tariffs on Indian textiles and clothing. Nepali and Bangladeshi garments were already 0% under the UK DCTS.

Which of the three has the lowest US tariff right now?

As of 24 September 2026, Nepal: cotton T-shirts pay the 16.5% MFN rate only. Bangladesh and India pay an extra 10% under the Section 301 action in force since 24 July 2026. US tariffs change often, so confirm before ordering.

What happens to Nepal and Bangladesh after LDC graduation?

The EU, UK and Canada each keep LDC-level access for three years after graduation actually takes effect. After that, the EU would move both countries to standard GSP (duty reduced, not removed) unless they qualify for GSP+; the UK’s Enhanced tier also lists 0% for these knit lines. The UN has not yet decided on their three-year deferral requests.

Can Nepal use Chinese fabric and still ship duty-free?

Yes for the EU, UK, Canada and Japan: their LDC rules for knit garments accept imported fabric as long as the garment is cut and sewn in Nepal. For India, Nepali garments face a separate value-content test under the Nepal–India trade treaty.

Sources

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