Dhaka, Jan. 30 -- India's newly announced free-trade agreement with the European Union (EU) could pose a serious challenge to Bangladesh's dominance in the European garment market, according to a report by Zee News.

The deal, aimed in part at offsetting pressure from higher US tariffs, will give Indian exports preferential access to the EU's 27 member states by eliminating or sharply reducing duties on a wide range of products.

Tariffs of nearly 12 percent on Indian textiles are expected to fall to zero, while levies on leather goods, marine products, handicrafts and jewellery will be reduced or removed altogether.

The agreement, concluded after almost two decades of negotiations, was formally announced on Tuesday by Indian Prime Minis...