With the August 1 deadline approaching, the long-anticipated trade agreement between the United States and India remains unsettled. President Donald Trump, while returning from Scotland, confirmed the deal was not yet finalized, raising the possibility of imposing tariffs between 20% and 25% on Indian goods. “I think so,” Trump said when asked about the potential rate, adding that although he shares a friendly rapport with Indian Prime Minister Narendra Modi, he believes India’s trade policies are excessively protectionist.
Trump reiterated that India has been levying significantly higher duties compared to other nations, saying, “You just can’t do that.” His remarks come at a crucial time, with a US delegation expected to land in India on August 25 for the next round of negotiations. However, both sides are striving to iron out their differences and possibly reach an interim deal before the August 1 tariff suspension expires.
The fifth round of discussions wrapped up recently in Washington. Earlier this year, Trump had announced reciprocal tariffs, which were initially delayed for 90 days until July 9, and later extended to August 1 to allow room for negotiations with key trading partners, including India.
According to US Trade Representative Jamieson Greer, discussions with India require more time. Speaking to CNBC, he emphasized that President Trump values the quality of deals over speed. Greer also noted a shift in India’s traditional trade stance, suggesting that the country is now showing openness in selected market areas.
On India’s side, Commerce Minister Piyush Goyal described the talks as progressing “fantastically.” Indian authorities have proposed tariff reductions on a wide array of goods while also addressing non-tariff issues. However, agriculture and dairy remain contentious. India continues to block imports of genetically modified soybeans and corn and is safeguarding its dairy industry from foreign competition.
In 2024, the total bilateral goods trade between the two countries reached $129 billion, with India maintaining a trade surplus of approximately $46 billion.
