Trump Hints at 20–25% Tariffs as India–U.S. Trade Deal Remains Unfinished

U.S. President Donald Trump has warned that a trade pact with India remains unfinalised and indicated that imports from India could face tariffs between 20% and 25% if no agreement is reached before the August 1 deadline. His remarks came just two days ahead of that deadline, ramping up uncertainty over an agreement that Washington has labelled "close" but not yet concluded.

Negotiations between the two countries have spanned five rounds. Indian officials expect a U.S. delegation in mid‑August, aiming to finalise a comprehensive bilateral trade agreement by September or October. Until then, New Delhi has refrained from offering further concessions, holding out for more substantive assurances.

Trump emphasised that India has charged higher tariffs on U.S. goods compared to most countries. He suggested that over 20% duties may be imposed if India maintains its current tariff structure. Trump also reiterated that India is a friend, mentioning that bilateral cooperation aided in resolving tensions with Pakistan.

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Impact on Sector

Steel, jewellery, automobile parts, textiles, and pharmaceuticals are among the important export industries that could be impacted by proposed tariffs of 20–25%. Analysts caution that these taxes would seriously disrupt export volumes and lessen India's competitive advantage in the U.S. market.

Timing and Trade Pressures

India is under pressure to secure trade assurances before August 1 to avoid automatic tariff activation. Previously, Trump had announced reciprocal tariff rates of up to 26% on Indian exports, later delaying implementation to enable talks.

India’s Response and Negotiation Posture

India has avoided committing to steep tariff cuts in public, with Commerce Secretary Sunil Barthwal confirming no formal pledges have been made. Meanwhile, India’s Commerce Minister Piyush Goyal described progress as “fantastic,” signalling openness to sectoral or phased deals instead of a full-scale treaty.

Trade observers note that unresolved agriculture and dairy concessions continue to stall the interim deal. India remains cautious about allowing cheap U.S. agricultural imports, given the political and economic sensitivity surrounding these sectors.

Conclusion

With the August 1 tariff trigger date imminent, the India–U.S. trade deal remains in limbo. Trump’s threat of tariffs as high as 25% underscores the urgency and stakes involved. While both sides aim for a broader agreement by autumn, unresolved disputes over tariffs and market access keep finalisation uncertain. Without clarity, India must brace for reciprocal duties that could reshape its export landscape.