The United States and India are reportedly nearing a trade agreement as the August 1st deadline for new reciprocal tariffs approaches. According to President Trump, the U.S. is "very close to a deal with India" that would lead to the opening up of Indian markets.
Trump's statement follows a recent trade deal with Indonesia, where tariffs were reduced from 32% to 19%. Trump suggested a similar outcome could be expected with India. He emphasized that the U.S. is seeking greater access to the Indian markets, similar to the access granted by Indonesia.
Commerce Minister Piyush Goyal has stated that trade talks between India and the U.S. are progressing rapidly, with both countries working together in a spirit of mutual cooperation. Negotiations are aimed at achieving a mutually beneficial trade agreement.
India is reportedly aiming for a tariff rate lower than the 19% agreed upon with Indonesia. Officials are seeking a more advantageous rate compared to both Indonesia's agreement and Vietnam's proposed 20% tariff. A negotiating team is currently in Washington to continue trade deal talks, with the goal of finalizing a tariff rate below 20%, potentially even below 10%.
Trump has been sending tariff letters to various U.S. trading partners, setting August 1, 2025, as the deadline for reciprocal tariffs to take effect. Over 20 countries have received tariff letters so far. However, India has not received a tariff letter, which may be due to ongoing trade negotiations. Trump has indicated that simply sending a tariff letter has been one of his most effective tools in securing favorable trade terms. He also noted the U.S. has already made billions through existing tariffs on steel and automobiles, and that several new deals are underway.
Earlier reports suggested that India and the U.S. were nearing a trade deal in late June. However, talks experienced a setback due to India's reluctance to concede on key agricultural demands. Despite this, Trump has repeatedly expressed confidence that an agreement with India is close to being finalized.
The U.S. President has sent out tariff letters to over 20 countries warning of new reciprocal tariff rates effective August 1, 2025. According to Brian Tan, an economist at Barclays Plc in Singapore, tariff rates are settling between 15%-20%, aligning with Trump's preferred range.
