According to Reuters reports, India is preparing to face higher US tariffs as trade negotiations continue beyond the August 1, 2025, deadline. The development comes as President Donald Trump intensifies pressure on trading partners to secure comprehensive bilateral agreements or face increased import duties.
India is bracing for higher US tariffs likely between 20% and 25% on some of its exports as a temporary measure, according to reports. President Trump confirmed these rates on Tuesday, stating that countries that do not negotiate a trade deal may face tariffs of 20% to 25%, though cautioning that the final levy has not been finalised.
Trump explained aboard Air Force One that "India has been a good friend, but India has charged basically more tariffs than almost any other country". The proposed tariff rate represents a slight reduction from the previously announced 26% reciprocal tariff.
New Delhi plans to resume broader trade negotiations when a US delegation visits in mid-August, with the goal of finalising a comprehensive bilateral agreement by September or October. One Indian official told Reuters that "talks are progressing well, and a delegation is expected in Delhi by mid-August".
India's Commerce Minister Piyush Goyal indicated that US negotiators would visit India in the latter half of August to advance discussions. The upcoming round is expected to cover unresolved issues related to market access, tariffs, and digital trade.
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US Trade Representative Jamieson Greer stated that more negotiations are needed with India, emphasising that Trump is more interested in good deals than quick deals. India has shown "strong interest in opening portions of its market", though its trade policy has long focused on protecting domestic interests.
Agriculture and dairy remain no-go areas, with India unwilling to allow imports of genetically modified soybean or corn, or to open its dairy sector. Indian officials said New Delhi has offered tariff cuts on a wide range of goods and is working to ease non-tariff barriers.
Total bilateral goods trade reached approximately $129 billion in 2024, with India posting a trade surplus of nearly $46 billion. India's merchandise exports to the US rose 22.8% to $25.51 billion in the April-June quarter this fiscal year, while imports rose 11.68% to $12.86 billion.
Without a deal, Indian exports could face average US tariffs of around 26%, higher than those faced by Vietnam, Indonesia, Japan or the European Union.
India is holding back on fresh offers while calibrating its strategy amid broader US tariff threats targeting BRICS nations over issues such as de-dollarisation and purchases of Russian oil. Trump announced on Monday that most partners without separate trade deals would face tariffs of 15% to 20% on their exports to the United States.
India's preparation for 20-25% US tariffs reflects the temporary nature of current trade tensions while broader negotiations continue. With a US delegation expected in mid-August and comprehensive deal discussions targeting September-October completion, both nations remain engaged in securing mutually beneficial trade arrangements worth over $129 billion in annual bilateral commerce.
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Published on: Jul 30, 2025, 11:48 AM IST
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