NEW DELHI: India is getting ready to face a possible hike in US tariffs — between 20% and 25% — on some of its exports ahead of Washington’s August 1 deadline, two Indian government sources said. While no deal has been reached yet, officials say they’re not giving up.
Fresh talks are set to begin in mid-August, with hopes that a broader agreement can be reached by early autumn. For now, India is holding back on new trade offers, choosing to wait and negotiate a better overall deal with the goal of finalising a comprehensive bilateral agreement by September or October, one of the Indian officials told Reuters.
“Talks are progressing well, and a delegation is expected in Delhi by mid-August,” one of the Indian government officials said, adding that President Donald Trump could issue a tariff letter imposing duties of 20% or 25% in a “worst-case scenario”.
“However, 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 said on Monday that most partners who 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 soon notify around 200 countries of their new “world tariff” rate.
US Trade Representative Jamieson Greer told CNBC on Monday that talks with India required more negotiation, as Trump was 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, Greer said.
Piyush Goyal, India’s trade minister, told Reuters last week that India is making “fantastic” progress in US trade talks.
Indian officials said New Delhi has offered tariff cuts on a wide range of goods and is working to ease non-tariff barriers.
However, 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.
Total bilateral goods trade reached about $129 billion in 2024, with India posting a trade surplus of nearly $46 billion.
India is holding back on fresh offers while recalibrating its strategy amid broader US tariff threats targeting BRICS nations — including India — over issues such as de-dollarisation and purchases of Russian oil, said another official.
“We remain hopeful of securing a deal that gives Indian exporters preferential access compared to our peers,” the official said.
Officials spoke on condition of anonymity, as they were not authorised to speak to media.
India’s commerce ministry and the US Trade Representative’s Office did not immediately respond to emailed requests for comment.
“We need more negotiations with our Indian friends to see how ambitious they want to be,” Greer said.
Analysts said that 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.