US President Donald Trump on Tuesday warned that the United States could impose tariffs of up to 25% on Indian imports if the two countries fail to finalise a long-anticipated trade agreement.
The threat marks a significant escalation in pressure as Trump’s self-imposed August 1 deadline for a deal approaches. While he stopped short of issuing a formal tariff notice, something he has done with numerous other trading partners, Trump previously set a 26% tariff on Indian goods in April before suspending those duties in hopes of finalising a reciprocal agreement.
US Trade Representative Jamieson Greer said Monday that more discussions are still needed to resolve outstanding issues. “They have expressed strong interest in opening portions of their market, we of course are willing to continue talking,” Greer told. “But I think we need some more negotiations on that with our Indian friends.”
Despite public optimism from Indian officials, India’s Commerce Minister recently voiced hope for a deal before the deadline, key disagreements remain unresolved. Trump has repeatedly criticised India’s high tariffs and what the White House calls “non-tariff barriers,” including taxes on digital services and restrictive regulations on foreign imports.
The president has described the US-India trade relationship as “very tough,” citing a goods trade deficit that has doubled over the past decade. In 2023, the US imported $87 billion worth of goods from India, including pharmaceuticals, smartphones, and apparel, while exporting $42 billion in goods to India.
“They charge more tariffs than any other country,” Trump said earlier this year. He added that during a meeting with Prime Minister Narendra Modi, he told the Indian leader, “You’re not treating us right.”
Trump has claimed on multiple occasions that India had agreed to impose zero tariffs on American exports. However, Indian officials, including Indian Foreign Minister S. Jaishankar, dismissed those statements as premature. “Nothing has been finalised,” Jaishankar said, calling the negotiations “complicated and intricate.”
While both sides continue to frame the talks as constructive, the threat of punitive tariffs now looms large over one of the world’s fastest-growing trade relationships.