U.S. President Donald Trump has warned that India could face tariffs of up to 25% if it fails to finalize a trade agreement with Washington by the end of this week.
Speaking to reporters on Tuesday, Trump confirmed that higher tariffs were a possibility if negotiations don’t result in a deal, responding, “Yeah, I think so,” when asked directly about the potential tariff increase.
The U.S. has set a deadline of August 1 for India and several other countries to wrap up trade agreements or face increased duties on exports to the American market.
Talks between Indian and U.S. trade officials have been ongoing for months. While some progress has been reported, the tone from negotiators has varied—at times hopeful, at other times cautious—regarding when a final deal might be reached.
When pressed on what he expects from India, Trump noted: “We’ll see what happens. India has been a great friend, but it’s also imposed some of the highest tariffs on us—higher than almost any other country.”
He added, “Now that I’m in charge, that kind of imbalance just can’t continue.”
The Indian Ministry of Commerce has yet to respond to these recent statements.
Tariffs, which are taxes on imported goods, have been a key point of contention between the two nations. Trump has frequently criticized India’s trade policies, previously calling it a “tariff king” and accusing it of taking advantage of the U.S. in bilateral trade.
Unlike several other trading partners, India has not yet received a formal tariff adjustment notification from the White House.
Earlier this year, Trump announced plans to impose tariffs of up to 27% on Indian exports—a move that was temporarily put on hold to allow space for negotiations.
Despite that pause, both sides have worked intensely to reach an agreement. U.S. Trade Representative Jamieson Greer acknowledged that while talks have been positive, India’s longstanding protectionist policies present challenges.
Greer said this week, “We’re continuing discussions with our Indian counterparts, and they’ve always been constructive. But we also recognize that India’s trade policy has historically focused on shielding domestic industries.”
Among the sticking points are agriculture and dairy. Washington has long pushed for greater access to India’s farm markets, viewing them as high-potential sectors for American exports. New Delhi, however, remains firm on protecting these industries, citing national food security and the livelihoods of millions of smallholder farmers.
Commerce Minister Piyush Goyal recently reiterated India’s position, stating in a CNBC interview that agricultural issues are “sensitive” and that the government would not compromise the interests of farmers.
Despite differences, Goyal expressed confidence in the talks. In a separate interview with Reuters, he said that discussions were making “fantastic progress” and expressed hope for a “significant and meaningful” agreement.
Trade between the two nations reached $190 billion in 2024, making the U.S. India’s top trading partner at the time. Both Trump and Prime Minister Narendra Modi have set an ambitious goal of increasing that figure to $500 billion.
India has already lowered duties on several U.S. products such as motorcycles and Bourbon whiskey, but the U.S. still records a $45 billion trade deficit with India—a gap Trump is eager to close.
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