US Warns India of Potential 25% Tariffs if Trade Deal Fails
President Trump warns India could face tariffs up to 25% unless a trade agreement is reached soon, with agriculture remaining a key dispute.
President Donald Trump has warned that India could face tariffs as high as 25% if a trade deal with the United States is not finalised this week.
"Yeah, I think so," Trump said on Tuesday when asked if India would face higher tariffs without an agreement.
The US has set a 1 August deadline for India and other countries to secure trade deals or face increased duties.
Negotiations between Indian and American officials have been ongoing for months, with officials expressing both optimism and caution about reaching a deal.
Trump criticised India for imposing high tariffs, stating, "India has charged basically more tariffs than almost any other country. But now I'm in charge, and you just can't do that."
Tariffs are taxes on imported goods, and Trump has repeatedly labelled India a "tariff king" and a "big abuser" of trade relations. However, he has yet to formally set new tariff rates for India, unlike with other trading partners.
Earlier this year, Trump announced tariffs up to 27% on Indian goods, which were later paused as talks continued.
US Trade Representative Jamieson Greer said discussions with India remain constructive but acknowledged India’s long-standing protectionist trade policies focused on shielding its domestic market.
Agriculture and dairy sectors remain major sticking points. Washington seeks greater access to India’s farm markets, but India defends its policies citing food security and the livelihoods of millions of small farmers.
Indian Commerce Minister Piyush Goyal recently affirmed that farmers’ interests will be protected and expressed optimism about reaching an agreement soon.
Goyal told Reuters that India is making "fantastic progress" and hopes to conclude a "very consequential partnership" with the US.
Until recently, the US was India’s largest trading partner, with bilateral trade reaching $190 billion in 2024. Both leaders aim to more than double this to $500 billion.
India has reduced tariffs on some goods such as Bourbon whiskey and motorcycles, but the US still runs a $45 billion trade deficit with India, which Trump is eager to reduce.
President Trump’s warning highlights the pressure on India to agree to a trade deal amid ongoing disputes over tariffs and agricultural market access.
This topic was reported by BBC News.
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