NEW DELHI — U.S. President Donald Trump has escalated tensions with India by warning of tariffs as high as 25% on Indian exports if a trade deal is not finalised by August 1, further complicating already fragile negotiations between the two countries.
Speaking to reporters aboard Air Force One, Trump reiterated long-standing complaints about India’s high tariffs and trade barriers, calling India “one of the highest tariff nations in the world.” He stated unequivocally, “They are going to pay 25%.”
The remarks come as the self-imposed deadline for a trade agreement looms, with U.S. officials saying further negotiation is necessary. U.S. Trade Representative Jamieson Greer noted that talks require “more time,” emphasising that Trump prioritises good deals over rushed ones.
India, for its part, has expressed optimism about reaching a deal. Indian officials confirmed that broader trade negotiations will resume in mid-August, with a goal of sealing a comprehensive agreement by October. Commerce Minister Piyush Goyal described progress as “fantastic,” though key sectors like agriculture and dairy remain off-limits to U.S. imports.
India has also reportedly agreed to certain tariff concessions and is working to ease non-tariff barriers. However, officials have held off on fresh concessions ahead of the U.S. deadline, anticipating potential tariff hikes as temporary measures in the “worst-case scenario.”
The situation is further complicated by broader U.S. tariff threats targeting BRICS nations, including India, over issues like de-dollarisation and Russian oil trade. Trump has suggested a sweeping “world tariff” of 15%–20% on countries without bilateral trade deals.
In 2024, U.S.-India bilateral goods trade reached approximately $129 billion, with India enjoying a $46 billion surplus. Top U.S. imports from India include pharmaceuticals, smartphones, and apparel.
Diplomatic tensions have also surfaced. Trump recently claimed he brokered a ceasefire between India and Pakistan—an assertion India firmly denies. Analysts say such remarks have cast a shadow over trade negotiations.
India remains hopeful of securing a preferential deal with the United States and avoiding a damaging tariff escalation that could affect key export sectors.
