Trump advocates for a 25% customs duty on imports from India.
The trade relationship between the United States and India is currently strained, following President Trump's imposition of reciprocal tariffs on Indian imports. In spring 2025, the U.S. hiked tariffs on Indian-made passenger vehicles and light trucks by 25%, and on some automotive parts by the same amount.
These tariff increases occurred amid ongoing negotiations for a proposed bilateral trade agreement (BTA). The sixth round of talks, scheduled for late August 2025, was postponed due to the tariff escalation and lack of progress on key issues such as U.S. demands to lower Indian duties on agricultural and dairy products.
India has strongly opposed these tariffs, with Prime Minister Modi stating that the country will prioritize farmers' and producers' interests and reject harmful policies. In response, India is reportedly ready to retaliate against the U.S.'s tariff increase.
The current status of the trade deal between the U.S. and India is uncertain. President Trump has expressed hope for a swift agreement that would open up the Indian market for American products, but he did not confirm that preparations for a trade deal were complete. The White House chief stated that they will pay 25% in relation to a trade deal, but the president did not specify what the 25% refers to.
The U.S. tariffs, effective August 7, 2025, are set to increase further to 50% starting August 27, over India's continued purchase of Russian oil. This would make the total tariff the steepest for a U.S. trading partner in decades. With the trade talks postponed and the imposition of tariffs, a period of heightened trade tensions is expected, at least until more substantive negotiation progress occurs.
Despite the tensions, President Trump referred to India as a good friend in the context of the trade discussion. However, he emphasized that, under his leadership, such a situation (high duties) cannot happen. India imposed duties that were higher than almost any other country, according to the president, but he did not provide details about the nature of the duties imposed by India.
References:
- The Economic Times
- The Hindu
- CNN Business
- Reuters
- The Guardian
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