US President Donald Trump has sent a letter to 14 countries to announce a mutual tariff of 25 to 40 percent, which will be effective from 1 August 2025. Meanwhile, negotiations on an interim trade agreement between India and the United States continue, but the deadline remains uncertain. India is trying to extend the deadline to avoid this tariff.
Trump has already implemented 25 percent of tariffs on Japan and South Korea, while the time has been given till 1 August to finalize trade talks with other countries including India. Indian officials stayed for talks in Washington last week, but issues such as agriculture and non-tariff barriers have not been agreed. “We are close to an agreement with India, which will trade with low tariffs,” Trump said.
The main bottleneck in trade talks between India and the US is the agricultural sector. The US is demanding India to open markets for maize, soybean, and GM crops, while India is refusing to cut tariffs in sensitive areas such as dairy and rice. India’s average tariff rate is 17%, while the US is 3.3%, especially in agriculture, India has a tariff of up to 39%. India has offered to reduce tariffs on automobiles and some industrial items, but has avoided comprehensive agricultural concessions.
As part of Trump’s policy, the US had targeted 90 trade agreements in 90 days, but so far only preliminary agreements have been made with the United Kingdom and Vietnam. This agreement is important for India, as the implementation of tariffs may affect a trade deficit of $ 45 billion. Indian business experts believe that a “mini-deal” is possible, which may include limited tariff cuts and strategic procurement.
Despite the controversy, the two countries are taking a positive attitude. US Commerce Secretary Howard Lutnik said, “The agreement with India is expected to be soon.” However, the pressure on India is increasing due to the time limit of 1 August and the strict policy of Trump.