U.S. President Donald Trump announced on Wednesday that a 25% tariff will be imposed on Indian imports beginning August 1.
Trump said India will also face an unspecified penalty on August 1, but he did not elaborate on the amount or what it was for.
“While India is our friend, we have, over the years, done relatively little business with them because their Tariffs are far too high, among the highest in the World, and they have the most strenuous and obnoxious non-monetary Trade Barriers of any Country,” Trump wrote in a Truth Social post.
“They have always bought a vast majority of their military equipment from Russia, and are Russia’s largest buyer of ENERGY, along with China, at a time when everyone wants Russia to STOP THE KILLING IN UKRAINE — ALL THINGS NOT GOOD!”
India’s commerce ministry, which is leading the trade negotiations with the U.S., did not immediately respond to a request for comment.
India Plans Broader Talks
India plans to resume broader trade talks with the U.S. in mid-August when a U.S. delegation is due to visit, hoping to seal a comprehensive bilateral trade agreement by October, Indian officials said.
“Talks are progressing well,” an official said, adding Trump could issue a tariff order in a “worst-case scenario”. The official declined to be identified without authorisation to speak to the media.
“But, we assume it would be a temporary measure, considering the five rounds of trade talks that have taken place. A deal will soon be worked out,” the official said.
Trump also reiterated his claim that he helped broker a ceasefire to a conflict between India and Pakistan earlier this year, saying both sides accepted his request.
“That was great,” he said, describing his friendship with Prime Minister Narendra Modi. India disputes Trump’s claims that he brokered the ceasefire.
Analysts say Trump’s remarks on the India-Pakistan conflict have cast a shadow on trade negotiations.
‘World Tariff’ Rate
On Monday, Trump said most partners that do not negotiate separate trade deals would soon face tariffs of 15% to 20% on their exports to the United States, well above the broad 10% tariff he imposed in April. His administration will notify some 200 countries soon of their new “world tariff” rate.
U.S. Trade Representative Jamieson Greer told CNBC the India talks require more time, noting Trump wants good deals, not fast ones.
India has shown “strong interest in opening portions of its market” though its trade policy had long focused on protecting domestic interests, Greer said.
Piyush Goyal, India’s trade minister, told Reuters last week India was making “fantastic” progress in U.S. trade talks.
Tariff Cuts Offered
Indian officials said New Delhi had offered tariff cuts on a wide range of goods and was working to ease non-tariff barriers.
However, agriculture and dairy remain “no-go” areas, with India unwilling to allow U.S. imports of genetically modified soybeans or corn or to open its dairy sector.
Total bilateral goods trade reached about $129 billion in 2024, with India posting a surplus of nearly $46 billion.
Officials said India was calibrating its strategy amid broader U.S. tariff threats targeting BRICS nations, including India, over issues such as de-dollarisation and Russian oil purchases.
“We remain hopeful of securing a deal that gives Indian exporters preferential access compared to our peers,” a second Indian government official said, speaking on condition of anonymity.
(With inputs from Reuters)
