US is 'close' to signing a trade deal with India, says Donald Trump

Says sending letters to more trade partners, will offer no extension beyond Aug 1

United States (US) President Donald Trump on Tuesday said America was “close” to signing a trade deal with India, but he did not give a date or details on it.

 

Trump’s statement came soon after he sent formal letters to 14 trading partners, primarily in Asia, threatening them with steep reciprocal tariffs, ranging from 25 to 40 per cent, from August 1. 

India was kept out of the list. 

He extended the country-specific reciprocal tariff deadline by over three weeks to August 1. In the letters, he mentioned that the tariffs these countries would face if they failed to conclude a deal. 

 

The countries are Japan, South Korea, Malaysia, South Africa, Kazakhstan, Tunisia, Bosnia and Herzegovina, Indonesia, Bangladesh, Serbia, Thailand, Myanmar, Cambodia, and Laos. 

Trump further said more letters would be sent to countries and “no extension will be granted” beyond August 1. 

“As per letters sent to various countries yesterday, in addition to letters that will be sent today, tomorrow, and for the next short period of time, TARIFFS WILL START BEING PAID ON AUGUST 1, 2025. There has been no change to this date, and there will be no change. In other words, all money will be due and payable starting AUGUST 1, 2025 - No extensions will be granted. Thank you for your attention to this matter!” Trump said on social media platform Truth Social. 

Trump has been stepping up pressure on countries to lower tariffs by concluding trade agreements with the US. Earlier, his administration announced reciprocal tariffs for countries, including 26 per cent on India, on April 2. Subsequently, it announced a 90-day pause on those to negotiate trade deals while retaining a universal 10 per cent tariff on countries.   

Interim deal 

Negotiators from India and the US have exchanged their offers for an interim deal last week, according to government negotiators. India is now awaiting a final go-ahead from the US President to accept the offer. In case a deal does not materialise, negotiators have a window of more than three weeks — till August 1 — to seal the deal. “It is now up to President Trump to assess, accept, and make any announcement (regarding the interim deal,” said a senior government official. 

In its offer, India has so far steered away from keeping several items from the politically sensitive area of agriculture in the deal despite pressure from Washington.

 

Indian negotiators have also bargained hard to avoid the reciprocal tariff levies while demanding lower tariffs for labour-intensive sectors such as textiles, leather, and automobile components.

 

Ajay Srivastava, former trade ministry official and founder of the Delhi-based think tank Global Trade Research Initiative (GTRI), said the tariff increase was expected to disrupt trade flows, increase consumer prices in the US, and cause broader supply-chain complications globally.

 

Exporters said in case India and the US were able to strike a deal, India would have a tariff advantage over other regional competitor countries. There will be more clarity once it is clear how many trade agreements the US is able to strike.

 

Srivastava said New Delhi must tread carefully.

 

“With the US showing willingness to override agreements and impose unilateral conditions, for example, on Brics members, India must weigh the strategic value of engagement against the risks of an imbalanced deal,” he said.

 

Meanwhile, Agriculture Minister Shivraj Singh Chouhan told reporters that agriculture was the backbone of India’s economy and the government would not compromise on the interests of the farmers in a trade deal with any country. 

 

The US is India’s largest trading partner. During FY25, merchandise exports to the US stood at $86.51 billion, up 11.6 per cent year-on-year. Imports stood at $45.69 billion, up 8.3 per cent, resulting in a trade surplus of $40.82 billion, the commerce and industry ministry data showed.