THE COTTON CHESSBOARD: WHO REALLY WINS ON COST? | Full Analysis of Cost | By Arvind Kumar Sharma

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When you buy a cotton T-shirt in the US, you see a price tag.

What you don’t see is the global battle behind it.

Let’s break this down in very simple words.



🌾 Step 1: Cotton – Where It Starts

India produces cotton locally at around $0.84 per kg.

Bangladesh imports cotton.
If it buys from the US, the landed cost (including shipping and handling) can be around $2.15 per kg.

So clearly:
👉 India has much cheaper cotton.
India wins the first round.



👕 Step 2: How Much Cotton Goes Into One T-Shirt?

One basic cotton T-shirt uses around 0.30 kg of cotton.

So cotton cost per T-shirt becomes:

🇮🇳 India → $0.27
🇧🇩 Bangladesh (US cotton) → $0.65

Again, India looks cheaper.

But we are not done yet.



🏭 Step 3: Manufacturing Cost

Bangladesh has lower labor costs and a highly export-focused garment industry.

Estimated manufacturing cost per T-shirt:

🇧🇩 Bangladesh → $2.50
🇮🇳 India → $2.80

Now let’s calculate total production cost before tariff.


📊 Base Production Cost (Before Tariff)

Category               🇧🇩 Bangladesh       🇮🇳 India

Cotton Cost                      $0.65                $0.27
Manufacturing Cost        $2.50                $2.80
Base Cost (Per T-shirt)    $3.15               $3.07

At this stage, India is slightly cheaper.

But here comes the real twist.



🚢 Step 4: The Tariff Impact

When exporting to the US:

Bangladesh → 0% tariff
India → 18% tariff

India’s tariff cost:

18% of $3.07 = $0.55

So India’s final cost becomes:

$3.07 + $0.55 = $3.62



💰 Final Cost Comparison

Country                              Final Cost per T-Shirt

🇧🇩 Bangladesh                               $3.15
🇮🇳 India                                           $3.62

Bangladesh becomes cheaper by about $0.47 per piece.

For an order of 10 million T-shirts, that difference equals:

👉 $4.7 million

That’s why brands care so much about trade agreements.



🧠 What This Really Teaches Us

India wins on raw material cost.
Bangladesh wins on labor.
But the real winner is decided by tariff policy.

A simple 18% tariff can shift:

Factory locations
Export volumes
Foreign investment
Jobs

This isn’t just about cotton.
It’s about how global trade works.
The T-shirt you wear is not just fabric.
It’s economics stitched together.

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