US President Donald Trump has set a firm August 1 deadline for concluding a trade agreement with India, warning that failure to reach a deal could result in tariffs as high as 25% on Indian goods entering the American market.
Trump voiced displeasure over India’s tariff policies, highlighting what he called an “unfair” trade imbalance. Data from the US Commerce Department reveals that American imports from India totaled $87 billion in 2024, while exports to India stood at just $42 billion. Key Indian exports include pharmaceuticals, mobile devices, and textiles.
“India imposes some of the steepest tariffs globally,” Trump stated, adding that such conditions hinder fair negotiations. Although the US had announced a 26% tariff on Indian imports back in April, the policy was suspended to allow room for trade talks.
Now, with time running out, Trump has issued a stern warning: countries lacking trade pacts with Washington may soon face tariffs between 15% and 20%, a significant jump from the 10% base rate introduced earlier this year.
Indian Commerce Minister Piyush Goyal, however, remains optimistic, calling recent talks “fantastic.” Despite this optimism, sources in New Delhi suggest that India is unlikely to offer new concessions until a US delegation arrives in mid-August for further negotiations.
The upcoming sixth round of discussions, scheduled for August 25, will focus on resolving key issues such as agricultural access, dairy trade, and industrial tariffs. Both nations are working toward finalizing a broader trade framework by September or October.
Among US priorities are improved market access for industrial goods, electric vehicles, genetically modified crops, and specialty foods such as tree nuts, apples, and wine.
Despite lingering disagreements, both India and the US acknowledge the importance of strengthening bilateral economic ties. Projections indicate that total trade in goods between the two countries could reach $129 billion this year, with India maintaining a trade surplus of approximately $46 billion.
