Trump Threatens 25% Tariffs As US-India Trade Deal Remains Unfinished

US President Donald Trump announced on Monday that a trade agreement with India has not been completed, signaling that India could face import duties as high as 25% if a deal is not reached by the August 1 deadline. Speaking to reporters, Trump confirmed that discussions are ongoing but warned of significant reciprocal tariffs.

When asked about the possibility of imposing tariffs between 20% and 25%, Trump responded, “Yeah, I think so”. He described India as a “good friend” but criticized its tariff policies, stating, “India has charged basically more tariffs than almost any other country”. These remarks come just two days before the deadline for the US to impose new duties on nations without a trade agreement.

Despite the president’s threat, Indian officials appear to be preparing for potential tariffs while planning to continue negotiations rather than rushing into new concessions. An Indian official indicated that talks are progressing and a US delegation is expected to visit New Delhi in mid-August for the next round of discussions. “We assume it would be a temporary measure, considering the five rounds of trade talks that have taken place. A deal will soon be worked out,” the official stated, adding that a comprehensive bilateral agreement is the goal by September or October.

Key disagreements remain, particularly concerning agriculture and dairy products. India has maintained its firm stance against allowing imports of genetically modified crops and has been unwilling to open its domestic dairy market.

US Trade Representative Jamieson Greer acknowledged that more time is needed for the negotiations. “President Trump is more interested in good deals than quick deals,” Greer said, noting that while India has shown “strong interest in opening portions of its market,” its history of protecting domestic industries has been a factor. In contrast, India’s Commerce and Industry Minister Piyush Goyal expressed optimism last week, describing the progress in talks as “fantastic”.

The trade relationship between the two nations is substantial, with bilateral trade in goods reaching approximately $129 billion in 2024, resulting in a trade surplus of nearly $46 billion for India. Trump also hinted at a broader tariff strategy, suggesting that countries without bilateral deals could soon face a “world tariff” of 15% to 20%.