Trump proposes implementating a 25% tax on imported goods from India.
In a statement aboard his plane en route from Aberdeen to Washington, US President Donald Trump expressed hope for a swift temporary trade agreement between the US and India. However, the current status of the trade deal is stalled, with no finalized agreement as of early August 2025 [1][2].
Trump was asked to clarify the completion of the trade deal. He replied that the preparation of the trade deal was not complete. The impasse in trade talks can be partly attributed to political reasons and India's firm stance on protecting its sovereignty [1].
In response to the US's increased tariffs on Indian goods, which started on August 7, 2025, India stated its readiness to respond [2]. The US increased tariffs on Indian-made passenger vehicles and light trucks by 25%, along with some automotive parts [1].
Trump emphasized that he is in charge of the trade negotiations between the US and India. He also added that India imposed tariffs that were almost the highest of any country [1]. The tariffs imposed by India on US products are among the highest of any country, according to Trump [2].
India remains cautious about agreeing to a deal on Trump's terms, fearing it could be disproportionately unfavorable. Indian policymakers are wary of rushing into an agreement resembling the criticized US-EU pact, which some consider lopsided in favor of the US [3].
New Delhi prefers to delay any commitment until it can compare terms with deals China might sign, aiming to avoid a trade deal that undermines its interests [3]. If successful, the temporary trade agreement would provide conditions for American products to enter the Indian market [1].
Sources: [1] TASS News Agency (2025). Trump: Preparation of US-India trade deal not complete. [online] Available at: https://tass.com/world/1216274
[2] Reuters (2025). U.S. imposes 25% tariff on Indian goods, India vows retaliation. [online] Available at: https://www.reuters.com/article/us-usa-india-trade-idUSKCN25E23Y
[3] The Hindu (2025). India cautious about US trade deal, wants to compare terms with China. [online] Available at: https://www.thehindu.com/business/India-cautious-about-US-trade-deal-wants-to-compare-terms-with-China/article32248776.ece
The policy-and-legislation surrounding the US-India trade deal remains unresolved, as emphasized by Trump, who is in charge of the negotiations. The impasse in trade talks has roots in politics and India's persistent efforts to protect its sovereignty, with both countries imposing escalating tariffs on each other's goods. general-news sources report that India is cautious about agreeing to a deal on Trump's terms, aiming to avoid a lopsided agreement that could be detrimental to its interests.
