Donald Trump, the US president said on Tuesday that India may be subjected to tariffs between 20 and 25 percent as part of a US move to impose reciprocal levies against trading partners with whom it has not yet reached new agreements.
President Obama’s comments, which were made on Air Force One after a trip to Scotland, came ahead of a deadline set for August 1, by which certain countries will either have to reach an agreement with the US, or else face increased tariffs.
Trump said that “India is a great friend, but India charges more tariffs on almost every country.” It’s just not possible.
Trump has confirmed that while the final tariff rate still needs to be decided, a range of 20-25% is being considered.
Tariffs of 10% were imposed on April 1st as a temporary measure to allow time for negotiation.
The administration, however, is moving forward to increase tariffs for trading partners including India, despite only having a handful of agreements in place.
Even as the deadline for tariffs looms, talks continue
US Trade Representative Jamieson Greer stressed Monday that more negotiations are required with India, pointing out that Washington prioritizes favorable deals rather than quick resolutions.
Greer said that more talks with Indians were needed to determine their ambition.
Officials from the Indian government confirmed to Reuters they were preparing for tariff increases in the 20%-to-25% range, but considered such measures to be temporary.
One official stated that “talks are moving forward well and we expect a delegation to arrive in Delhi mid-August”, suggesting a comprehensive agreement might be reached by October or September.
New Delhi has resisted further trade concessions.
The Indian Trade Minister Piyush Goyal described recent progress in the negotiations as “fantastic”.
India offers tariff reductions on many goods, while also working on non-tariff barriers. However, the country is still steadfast in its refusal to open up their agriculture and dairy industries, especially to imports of GM soybeans, corn and other foreign dairy products.
Global trade tensions and strategic calculations
India is recalibrating its trade strategy as a response to US tariffs against other BRICS countries over geopolitical concerns such as the de-dollarisation of oil and Russian purchases.
Officials in India have indicated that they want to negotiate a deal which offers Indian exporters privileged access to other economies.
In 2024 the total bilateral trade in goods between India and the US reached $129 billion, while India recorded a surplus of almost $46 billion.
Without a deal with India, US exports could face an average tariff of 26%, which is higher than the US’s tariffs on Vietnam, Indonesia and Japan or those applied to European Union.
Negotiations may be prolonged if key issues and geopolitical complexity persist.
Indian officials are optimistic that an agreement which is both balanced and beneficial to all parties will be achieved in the next few months.
As updates emerge, this post Trump announces potential tariffs up to 25 percent on India could be revised.
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