With just two days left until his self-imposed August 1 deadline, US President Donald Trump has announced that a trade agreement between the United States and India is still not finalised, raising concerns about escalating trade tensions between the two strategic partners. Speaking aboard Air Force One during a media interaction, Trump hinted at the possibility of imposing new tariffs ranging between 20 to 25 per cent on Indian imports, citing long-standing trade imbalances.
Responding to a question about whether India would face steep tariffs, Trump remarked, “Yeah, I think so. India is my friend. They ended the war with Pakistan at my request. The deal with India is not finalised. India has been a good friend, but India has charged basically more tariffs than almost any other country.” He emphasized that India’s high tariffs on American products have long been an issue and that under his leadership, “all this would come to an end.”
Though Trump has not yet formally notified India of any new tariff decision—unlike other nations he has targeted in recent months—his comments are being viewed as a final warning ahead of a potentially disruptive trade shift. Trade negotiators on both sides have been trying to reach a breakthrough, but signs of progress remain unclear.
The remarks come at a sensitive moment as global trade anxieties rise and Washington's protectionist policies under Trump continue to draw international concern. Despite earlier optimism, including repeated statements by Trump himself that a trade deal was “close,” a definitive agreement now appears increasingly unlikely before the looming August 1 deadline.
India’s Commerce Minister Piyush Goyal recently addressed the issue, saying that talks between the two countries have been “going very well,” and reiterated that India is now negotiating from a position of “strength and confidence.” He asserted that India is seeking free trade agreements that are fair, balanced, and mutually beneficial. Goyal added that the country’s current economic stability and global standing have bolstered its ability to engage confidently with international partners, including the United States.
According to Ministry of Commerce data, the US remains India’s largest trading partner, with bilateral goods trade reaching USD 191 billion in FY24. India exported USD 77.5 billion worth of goods to the US while importing USD 55.4 billion. However, the growing rhetoric around tariffs threatens to upset this critical economic relationship.
Earlier this year, on April 22, Trump had briefly imposed a 26 per cent tariff on Indian goods before pausing the levy and leaving room for negotiations. His latest remarks, however, signal that he may be prepared to reimpose or even expand such tariffs unless a deal is reached swiftly.
